The U.S. Supreme Court justices began hearing arguments in a landmark, Florida-led challenge to the 2010 federal health law, with the politically sexy issue of the “individual mandate” — a requirement that most Americans have health insurance.
But for Florida and other states, the case also centers on a more-wonkish part of the law that would lead to a major expansion of the Medicaid program in 2014.
Justices will weigh whether Congress overstepped its authority when it approved eligibility changes that would allow millions of low-income adults to start qualifying for Medicaid. If states don’t go along with the expansion, they risk losing billions of dollars in federal money that plays a vital role in paying for current Medicaid services.
Florida Attorney General Pam Bondi and other opponents argue the expansion is an unconstitutional act of “coercion” by the federal government — effectively giving states no choice but to enroll more people in Medicaid and to absorb future costs.
“If the federal government can coerce states to administer federal programs by threatening to withhold billions of dollars that are extracted from in-state taxpayers in the first place, then there are no limits to Congress’ spending power,” Bondi said recently.
But the Obama administration says Congress has always had the authority to expand the federally-created Medicaid program — and has done so in the past.
Administration lawyers say states can drop out of Medicaid if they don’t want to go along with the expansion. But they argue state leaders don’t want to make such a difficult political choice because it would involve giving up billions of dollars in federal aid.
“At bottom, what petitioners (the states) are contending is that it would be politically untenable for them to withdraw from Medicaid because their citizens would bridle at the resulting loss of medical services or the added tax burden needed to maintain these services,” administration lawyers wrote in a Supreme Court brief.
Supreme Court justices will hear arguments Monday, Tuesday and Wednesday in the historic challenge to the 2010 law, which has become a lighting-rod issue in American politics.
President Obama and congressional Democrats approved the law to try to make sure almost all Americans have health coverage. But immediately after Obama signed the law, former Florida Attorney General Bill McCollum filed a constitutional challenge, which ultimately was joined by 25 other states and the National Federation of Independent Business.
The hearings will be broken up to address different legal issues, with the largest amount of public attention focused on a Tuesday session about the so-called individual mandate.
That part of the law would require almost all Americans to have health coverage in 2014 or pay a penalty. It has fueled two years of intense debate about whether Congress has the power to impose such a requirement.
The 11th U.S. Circuit Court of Appeals last year agreed with Florida and the other opponents and found the individual mandate unconstitutional. But it upheld the Medicaid expansion, which will go before the Supreme Court during a Wednesday hearing.
Medicaid has long been a controversial issue in Florida, with Republican leaders complaining about escalating costs and a fractured system of providing care. Lawmakers last year approved a proposal, which is being reviewed by the federal government, that eventually would shift almost all Medicaid beneficiaries into managed-care plans.
The federal health law would expand Medicaid eligibility to help carry out the broader goal of making sure most people have health coverage.
Medicaid has traditionally focused on providing coverage to targeted groups, such as low-income children and mothers, people with disabilities and seniors who need nursing-home care. States administer day-to-day operations of the program, though a majority of the funding comes from the federal government.
A key change in the 2010 federal law would open up Medicaid to adults who don’t meet other current qualification guidelines but whose incomes are below 133 percent of the federal poverty level. In 2012, for example, that would translate to an income of $20,123 for a two-person household, according to the website of the advocacy group Families USA.
Under the law, the federal government would pay all of the costs of extending eligibility from 2014 through 2016. Its share would go to 95 percent in 2017 and gradually decline to 90 percent in 2020.
Even with the federal government paying most of the costs, opponents contend the law will cost Florida hundreds of millions of dollars. Along with adding newly eligible people, opponents say the individual mandate part of the law would lead people who are already eligible — but not enrolled — to start getting coverage through Medicaid.
But in a brief, the Obama administration disputes that overall costs would go up for states because the law would create other health-care savings. One benefit, for example, is that the law would reduce the amount of uncompensated care across the country because more people would have insurance.
The brief said states “greatly exaggerate the burden” of the expanded eligibility, which would fill gaps in Medicaid coverage.
“The result will be to make coverage available to millions of low-income individuals who might otherwise lack access to adequate health care or consume health-care services in the form of uncompensated care,” the brief said.
But opponents cast the issue as states needing to be able to make policy decisions about expanding Medicaid. They say Congress can’t threaten to withhold Medicaid funding to force states go to along.
“Indeed, if the (federal health law) does not cross the line, no act of Congress ever will,” said a brief filed by Florida and the other opponents.
By Jim Saunders
