This piece was co-written with Forbes contributor Peter Ferrara.
The Social Security Institute has joined with the American Civil Rights Union in filing anamicus curiae brief to the Supreme Court arguing that ObamaCare’s expansion and transformation of the Medicaid program violates the Tenth Amendment under the Court’s Coercion Doctrine. In overstepping the bounds between acceptable pressure and unacceptable compulsion, ObamaCare transgresses state sovereignty and violates the constitutional framework of federalism. Peter J. Ferrara wrote the brief on our behalf. The essence of that brief follows:
Medicaid was enacted in 1965 as a federal-matching, grant-in-aid program to the states with each state free to decide whether and when to participate. Historically, the federal government has paid for 50 percent to 83 percent of total program costs in each state, the exact federal matching share determined by a statutory formula calculating the federal contribution in each state.
Until the 2010 enactment of the Patient Protection and Affordable Care Act (ObamaCare), Medicaid preserved state sovereignty and was consistent with the constitutional framework of federalism, despite numerous stringent federal mandates, because the states retained substantial discretion to decide Medicaid eligibility, determine the scope and duration of coverage, and they were free to discontinue participation in Medicaid if not satisfied with the terms and conditions imposed by the program.
At the core of ObamaCare is the individual mandate requiring every citizen to obtain health-insurance coverage with the benefits and provisions specified by the federal government. The way ObamaCare provides for lower-income individuals and families to obtain that required coverage is by forcing the states to offer expanded coverage under Medicaid as a condition of continuing to participate in the rest of the program.
Under ObamaCare, the federal government now imposes Medicaid on the states as a federal mandate to meet the federal requirements of the individual mandate for the entire below-age-65 population with incomes under 138 percent of the poverty line. That includes mandatory coverage for the first time of all non-elderly, childless adults within the income limits. The states, consequently, no longer retain substantial discretion to determine eligibility or scope and duration of coverage for the program within their respective jurisdictions, which makes the program unacceptably coercive.
The result of this coercion will be to increase Medicaid enrollment by 24 million additional beneficiaries by 2015, covering nearly 100 million Americans by 2021 according to the Congressional Budget Office (CBO). The chief actuary of the Centers for Medicare and Medicaid Services estimated that ObamaCare will impose at least another $20 billion to $42 billion in additional costs on the states by the end of the decade, even counting all the federal financing for Medicaid, not to mention other open-ended mandatory costs that are inestimable.
ObamaCare threatens the states with the loss of all federal Medicaid funds unless they buckle to all of the new, mandatory expansions of state obligations under the program. Federal Medicaid funds currently account for more than 40 percent of all federal funds granted to the states, amounting to more than $276 billion in 2011 alone. Even before enactment of ObamaCare, federal and state spending on Medicaid amounted on average to 20 percent of total annual state budgets.
In Florida, for example, had the state not had federal funds available in 2010, Medicaid benefits would have consumed almost two-thirds of Florida’s tax revenue. As for the federal claim that Florida could just raise its own taxes to pay those benefits if it doesn’t want to comply with the ObamaCare’s mandates, the federal government already collects more than $100 billion per year in federal taxes from Florida residents, leaving little or no capacity for further state tax increases to make up the difference.
ObamaCare Makes Medicaid An Offer States Can’t Refuse [continued]
