Day 3 at the Supreme Court

Updated
 
The health care debate -- and the festivities outside -- wrap up at the Supreme Court today.
The health care debate -- and the festivities outside -- wrap up at the Supreme Court today.
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As the legal and political world digests what transpired at the Supreme Court yesterday – to be sure, this is no easy task – the legal challenge to the Affordable Care Act isn’t quite finished. Indeed, though yesterday offered more than its share of drama, it’d be a mistake to overlook the significance of today’s proceedings.

While Monday featured an argument over the Anti-Injunction Act, a relatively obscure 19th-century law on taxes, and yesterday was all about the mandate the right loved until they didn’t, today will tackle “severability” and the ACA’s expansion of Medicaid. Let’s take these one at a time.

The severability question is pretty straightforward: if a majority of the justices ignore precedent, adopt a radical approach to Commerce Clause jurisprudence, and strike down the individual mandate, do they have to take down the entirety of the health care law, too? Or can this one provision of the law be “severed” from the larger ACA, leaving the rest of the law intact?

The significance of the answer should be obvious: if the court majority takes down the mandate, it could still leave in place key elements of the law that provide protections for millions of Americans. Or, it could take down every letter of every page of the law. (Of course, if the mandate goes down, finding a way to make the system function would be a dramatic challenge in its own right, but that would be a matter for policymakers, not the judiciary.)

The Medicaid expansion question is a little trickier, but just as important. Aaron Carroll published a good piece on this yesterday.

As Medicaid currently stands, it covers children in poverty, pregnant women in poverty, and parents who qualify under some pretty restrictive regulations. Adults without children, however, are often out of luck. In the majority of states, it does not matter how poor childless adults are; they cannot qualify for Medicaid.

As part of the Affordable Care Act (ACA), Medicaid regulations change. Starting in 2014, all adults, regardless of whether they have children, will be eligible for Medicaid if they earn up to 133% of the federal poverty line. These changes are an enormous expansion of Medicaid, so much so that about half of the newly insured under the ACA will be getting their coverage through the program.

Of course, such a large expansion cannot be cheap. In fact, the Congressional Budget Office estimates that it will cost almost $800 billion over the next decade. To make this more palatable to states, the federal government will cover 100% of the expansion when it begins in 2014. That will slowly phase out, so that by 2020, the federal government will cover 90% of the expansion. While this will leave states paying for some of those who will newly be eligible for Medicaid, their share of the expansion will still be far less than the 25% to 50% that they must cover for Medicaid today.

To make this work, states aren’t given much of a choice: go along with Medicaid expansion or risk losing all Medicaid funding from Washington. And therein lies the rub.

The coercion isn’t sitting well with Florida and its partners, which are arguing that Medicaid was supposed to be an option for states, not a mandate from Congress.

The administration’s response is simple: it’s still optional, and if states don’t like the expansion on Medicaid eligibility, they don’t have to participate in the Medicaid program. The feds have the power to alter Medicaid law – this isn’t even the first time – so the argument is baseless.

For the Supreme Court to side with the plaintiffs on this would represent a breathtaking shift in the interaction between Washington and the states.

As Carroll concluded, “If the mandate gets struck down, that will have implications for the ACA. If the Medicaid expansion is struck down, it will have much broader implications for how Congress can use federal funding to set national policy in all sorts of areas.”

Affordable Care Act, Obamacare and Supreme Court

Day 3 at the Supreme Court

Updated