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Subtle conservative victories lurk within the health care ruling

Thursday’s ruling laid groundwork for future conservative rulings, a University of Minnesota professor says.

Protesters against the health care overhaul gathered outside the Supreme Court on Thursday.

Without question, the big story out of Thursday’s Supreme Court ruling was the survival of the Affordable Care Act, almost in its entirety. But University of Minnesota Law Professor Dale Carpenter said that in subtle ways, the five conservative justices laid the groundwork for the continuation of the court’s conservative drift of recent years.

“Conservative constitutionalists won on two very important issues,” Carpenter said, indicating to him that “the federalism revolution is not over.” Specifically:

1. All five of the conservatives agreed that Congress’ power to regulate interstate commerce is not broad enough to justify the individual mandate requiring Americans to buy health insurance. Yes, true, Chief Justice John Roberts decided that the mandate could be preserved in effect by viewing it through Congress’ taxing power. That saved the heart of President Obama’s signature legislative accomplishment. But considering how much of the expansion of federal power since the New Deal has been justified constitutionally via the Commerce Clause, the fact that a five-member majority of the court said the Commerce Clause couldn’t be stretched to require individuals to engage in a form of commerce against their wishes – that is to buy health insurance when they preferred not to – signals to Carpenter that “this court really is going to be watching what Congress does” and is not inclined to buy unlimited expansions of congressional power under the Commerce Clause.

2. Secondly, not just the conservatives but seven of the nine justices struck down the portion of the health care law that could have taken all federal Medicaid funding away from states that declined to participate in the expansion of Medicaid envisioned by the so-called Obamacare law. This was the only major defeat for the administration in the ruling yesterday, and it remains to be seen whether Republican-dominated states will actually opt out of the Medicaid expansion as a symbol of their resistance to federal overreaching. But Carpenter said this was the first time since the New Deal that the court had struck down an effort to use the leverage of withholding federal largesse to dragoon states into going along with pressure from Washington.

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That word “dragoon” is actually from the ruling.  

Medicaid is a state-federal cost-sharing program to provide health care to the poor. States don’t have to participate if they don’t want to pay their share of the cost. But they all do and some states get up to 10 percent of their total budget in the form of federal payments for Medicaid. One of the biggest underemphasized aspects of the Affordable Care Act is the expansion of Medicaid so that it covers families with higher incomes than in the past. The feds are offering to pay the majority of the cost but states would have to pay a minority share that would gradually rise to 10 percent of the cost of the expansion.

State participation is voluntary. But to make sure states agree to pay their share of the Medicaid expansion, the law gave the federal government the power to withhold all federal Medicaid subsidies – not just the portion associated with the expansion but all of the Medicaid money that a state has been receiving for years – from any state that declined to participate in the Medicaid expansion.

The threatened loss of so much federal money “is economic dragooning that leaves the states with no real option but to acquiesce in the Medicaid expansion,’’ Roberts wrote. “A state could hardly anticipate that Congress’s reservation of the right to ‘alter’ or ‘amend’ the Medicaid program included the power to transform it so dramatically… Congress [cannot] penalize states that choose not to participate in that new program by taking away their existing Medicaid funding.’’

“Much of what Congress does nowadays is done in the form of conditional spending,” Carpenter said. Previous Supreme Court rulings have suggested that there must be some limit to federal power to coerce states through the threat of withholding funds, “but this is the first time the court has identified an unconstitutional overreach in this kind of pressure,” Carpenter said. “I would expect challenges to conditional spending to increase.”