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Monday, February 27, 2012

Federalism Challenge to Medicaid Expansion Under the Affordable Care Act: Florida v. Department of Health and Human Services

Kenneth R. Thomas
Legislative Attorney

In March 2010, the 111th Congress passed P.L. 111-148, the Patient Protection and Affordable Care Act as amended by P.L. 111-152, the Health Care and Education Reconciliation Act of 2010. Jointly referred to as the Affordable Care Act (ACA), the ACA, among other things, expands Medicaid eligibility. Following the enactment of the ACA, state attorneys general and others have brought several lawsuits challenging various provisions of the act on constitutional grounds. One of these cases, now before the Supreme Court, involves a federalism challenge to the expansion of Medicaid eligibility. This case, Florida v. Department of Health and Human Services (HHS), will address the issue of whether withholding Medicaid reimbursement to a state unless that state complies with an expansion of its responsibilities under the Medicaid program exceeds Congress’s enumerated powers under the Spending Clause and violates the Tenth Amendment.

The Supreme Court in Florida v. HHS will address whether, under the ACA, states are being “coerced” into compliance with the expanded state requirements. This “coercion” test, articulated in South Dakota v. Dole in 1987, appears to be closely related to the Tenth Amendment prohibition on the federal government “commandeering” states to implement federal programs. The “coercion” test, however, has never been applied by the Supreme Court to strike down a federal statute, and has been so little developed by the Court that most federal courts of appeals have simply rejected similar challenges with little analysis.

Of even more concern, an examination of analogous “unconstitutional conditions” cases (cases where a constitutional right is waived in order to receive a federal benefit) suggests that the issue of “coercion” is actually far more complex than just an evaluation of the level of federal benefits threatened to be withheld. Rather, such challenges generally also consider what burden is imposed by the grant condition itself, what federal interest the grant condition serves, and how direct is the relationship between the grant condition and the federal benefit. While it appears that the Medicaid expansion could be upheld under this more complex analysis, it is unclear whether the Court can develop a clear standard to balance these factors in a way that could be easily applied to the multitude of federal grant conditions that are presently imposed on states.

Date of Report: February 21, 2012
Number of Pages: 20
Order Number: R42367
Price: $29.95

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