Supremes on Medicaid: “Loaded Gun”?

Although the insurance mandate gets most of the attention, many believe that it’s the Supreme Court outcome on Medicaid expansion within ACA that could have the longest lasting impact. Stanford professor Pamela Karlan wrote in last Sunday’s Times that the Roberts court ruling on Medicaid contributes to a neutering of federal power that should have liberals worrying big time:

For the first time since the New Deal, the court struck down an exercise of Congress’s spending power. It held that Congress lacked the power to deny Medicaid funds to states that refuse to expand their coverage. Chief Justice Roberts — joined by the liberal justices Stephen G. Breyer and Elena Kagan — held that while the government can deny additional Medicaid funds to states that refuse to expand their coverage, it cannot penalize them by rescinding current Medicaid payments. This is a loaded gun indeed.

Prof. Karlan notes that this is just the latest in a string of rulings curbing federal power, with cases coming down the pike next term on voting rights, affirmative action, same-sex marriage, and environmental affairs giving the Court opportunities to chip away further.

Without discounting Prof. Karlan’s conclusion that the trend at the Court gives “Americans who care about economic and social justice a reason to worry,” I do think after reading the Roberts opinion and the Ginsburg dissent carefully that she overstates a bit the ruling’s logic and argument on Medicaid (though granted, not the effect!). The Court held that the federal government can penalize states by rescinding current payments if the expansion is modest and incremental rather than radical. There is a fundamental difference of opinion between Roberts and Ginsburg over whether this particular expansion is modest or radical.  To use the language in their back and forth in their opinions, is it a difference in kind (Roberts) or degree (Ginsburg)?  Personally I’m inclined to side with Ginsburg and Sotomayor on this point, though it isn’t necessarily a simple or straightforward call.

It’s fascinating that this aspect of the case split the liberal wing of the Court — with Kagan and Breyer joining Roberts to find that it’s a difference in kind, not degree, and accordingly conclude that its overly coercive on the states. Perhaps they genuinely bought the Roberts formulation that the Medicaid expansion really is a difference in kind.  But I am guessing that  what tilted them might have been Roberts’ willingness to keep the ruling narrow — to say that the finding of undue coercion on the states invalidates only the threat to revoke all Medicaid funding to a state that rejects the new funding and conditions, but doesn’t (as the Scalia/Kennedy/Alito/Thomas cabal would have) invalidate the whole kit-n-kaboodle.  Of course, Ginsburg and Sotomayor expressly at the end of their dissent bought into that limiting principle regarding what gets invalidated, making it possible for that narrow effect to prevail (otherwise the whole thing would could have been tossed). The coalition dynamics on the Court were fascinating on the Medicaid issue, arguably moreso than on the mandate.

A conspiracy theorist might argue that Roberts sold his conservative brethren out on the mandate in order to buy Breyer and Kagan’s support on the Medicaid aspect, getting what he really wanted most of all — Prof. Karlan’s loaded gun: the potentially huge dent in federal spending power that some construe in the Medicaid outcome.  Hard to say, though, because these kinds of SCOTUS “turns” take a decade or two to really see in full.