Supreme Court to review Medicaid expansion

Pillars and facade of US Supreme Court building

When the Supreme Court announced November 14 it would take its first look at the Obama health care bill this spring, most court observers assumed it would only examine the constitutionality of the bill’s provision requiring all individuals nationwide to buy health insurance.

But in a surprise move, the Supreme Court will also review whether the bill’s planned Medicaid expansion, like the individual mandate, is an overreach of the federal government’s power.

Medicaid is set to loosen its eligibility requirements to provide services for people making up to 133 percent of the poverty line by 2014. The current threshold is at the poverty line, with a few specific exceptions. The move is projected to provide coverage for 17 million uninsured Americans, including many people with disabilities who currently earn just enough to no longer qualify for Medicaid benefits.

Because Medicaid is a voluntary program in which states can opt out of, it is has long been established that the federal governments has complete authority to revise the program’s eligibility rules, even if it requires the states to spend new additional funds. The 26 state attorney generals who filed the lawsuit, however, argue that the planned expansion of Medicaid is so vast that it is an “unconstitutional coercion” of state governments, according to an article in the Washington Post.

The “coercion” doctrine comes from a little-known 1987 case called South Dakota v. Dole, where the court ruled that “Congress cannot place restrictions so burdensome and threaten the loss of funds so great and important to the state’s integral function as a state.”

The Supreme Court is hearing the case from the U.S. Court of Appeals for the 11th Circuit, the only one of four appellate courts nationwide to rule against the individual mandate. However, the court upheld the Medicaid expansion, devoting fewer than 14 pages to the issue in its nearly 300-page decision. The court said the program was not “unduly coercive,” noting that the states will have had four years from the time of the bill’s passage to prepare for the new eligibility standards, and that the federal government will foot all the expansion’s expenses for its first couple of years.

“The Court has never employed the (coercion) theory to invalidate a funding condition, and federal courts have been similarly reluctant to use it,” the court stated.

A number of disability rights groups joined the U.S. government’s argument in the case, including the National Disability Rights Network and the ARC.

The Obama administration recently dropped a key program of the health care bill for people with disabilities. Under the CLASS Act, the administration would have created a a voluntary insurance program for people needing long-term care, but the administration determined it could not create such a program within the parameters of the law’s provisions requiring it to attract enough customers to be fiscally sustainable.

The House Energy and Commerce Committee voted Tuesday to end the CLASS Act legislation. Disability rights groups and the National Council of Disability have urged Congress to retain the legislation and attempt to create a new insurance program for long-term care.

The health care bill barred insurance companies from discriminating against people with pre-existing conditions and provides a variety of other protections for people with disabilities.

DisAbility Rights Washington, the sponsor of DisAbility Rights Galaxy, is part of the federally funded protection and advocacy system and a member of the National Disability Rights Network.