American Health Line

Today's News

April 21, 2013

U.S. Supreme Court Leaves Governors, Officials With Decision To Expand Medicaid

Story Highlights:
* State officials now must decide whether to comply with the federal health reform law's Medicaid expansion, after the U.S. Supreme Court yesterday ruled that states effectively can opt out from the provision.
* The justices affirmed the constitutionality of the Medicaid expansion, but struck down the provision that would have allowed the federal government to withhold existing Medicaid funding if states failed to comply.
* Some governors yesterday praised the decision and pledged to move forward with the expansion, while others indicated that they are considering opting out.

State officials now must decide whether to comply with the federal health reform law's Medicaid expansion, after the U.S. Supreme Court on Thursday ruled that states can effectively opt out from the provision without any effect on funding, The Hill's "Healthwatch" reports (Viebeck, "Healthwatch," The Hill, 6/28). According to the Wall Street Journal, the high court in an unexpected twist showed sympathy for the argument that the provision would place an unfair burden on states (Burton et al., Wall Street Journal, 6/28).

Law's Medicaid State Funding Rule 'a Gun to the Head,' Chief Justice Roberts Says

Writing for the majority in the 5-4 ruling, Chief Justice John Roberts affirmed the constitutionality of the Medicaid expansion provision requiring states to extend coverage to adults with incomes up to 133% of the federal poverty level beginning in 2014. However, the justices struck down the provision that would have allowed the federal government to withhold existing Medicaid funding if states failed to comply with the expansion.

Roberts wrote that the provision gives states no choice. They "must either accept a basic change in the nature of Medicaid or risk losing all Medicaid funding" (American Health Line, 6/28). Roberts added that the "financial 'inducement' Congress has chosen is much more than 'relatively mild encouragement' -- it is a gun to the head."

Roberts said the ruling does not prevent Congress from providing funding to "expand the availability of health care, and requiring that States accepting such funds comply with conditions on their use." However, "What Congress is not free to do is penalize States that choose not to participate in that new program by taking away their existing Medicaid funding ...," he wrote ("Judging the Health Law," Kaiser Health News, 6/28).

Roberts noted that the Supreme Court "today limits the financial pressure the secretary may apply to induce states to accept the terms of the Medicaid expansion," stating that "[a]s a practical matter, that means states may now choose to reject the expansion; that is the whole point. But that does not mean all or even any will" (American Health Line, 6/28).

State Officials Left To Mull Tough Decisions

Following Thursday's ruling, some governors "hailed the decision as an affirmation" of steps they already have taken to implement the overhaul's provisions, while others "begrudgingly" indicated that they would comply, USA Today reports (Raasch, USA Today, 6/28). Some Republican governors are "seriously considering" opting out, according to the Journal.

Governors from some Republican-led states -- including, Mississippi, South Carolina, Nevada and Virginia -- indicated that they are considering opting out, while Democrats in California, Illinois and Washington state said they plan to press ahead with their expansion plans (Wall Street Journal, 6/28).

According to the New York Times, most Republican-led states that declined to begin preparing for the Medicaid expansion and other provisions until the Supreme Court had ruled on the law now will have to "scramble" to meet approaching deadlines.

Wisconsin Gov. Scott Walker (R) on Thursday said that in spite of the high court ruling, the state "will not take any action to implement Obamacare," adding that he will wait to see if Republicans win the presidency and regain full control in Congress in November.

Former Republican presidential candidate and Texas Gov. Rick Perry (R) in a statement declined to indicate his state's next steps on the overhaul, but he added, "Now that the Supreme Court has abandoned us, we citizens must take action at every level of government and demand real reform" (Sack/Abelson, New York Times, 6/28).

Pelosi, Obama Officials Expect States To Move Forward With Implementation


House Minority Leader Nancy Pelosi (D-Calif.) on Thursday said she expects states to move forward with the Medicaid expansion despite the Supreme Court ruling, the Washington Post reports. Pelosi said it will be difficult for states to opt out, because "[o]nce this bill is rolling and people experience benefits of it, it's very hard for a state to say [no]" (Khimm, Washington Post, 6/28).

Senior Obama administration officials during a White House briefing on Thursday also expressed confidence in the cooperation of states, noting that full federal funding provided under the overhaul for the Medicaid expansion in the first three years, and additional funding in subsequent years would spur all states to participate (Reichard, CQ HealthBeat, 6/28).

-- compiled by Lindsey Underwood