Justice Kagan hardly let the word “coercion” leave Mr. Clement’s mouth before she hit him with a very blunt question: “Why is a big gift coercive?”
Therein lies the major distinction at the heart of the Medicaid expansion battle. Is it really a gift? Or is it “an offer the states can’t refuse,” as Justice Scalia – quoting Vito Corleone – said?
Mr. Clement charged that the Medicaid expansion presented an unconstitutional breach of the principles of federalism. He argued that the states had no choice considering that the program in question is so big, and that the states must accept new funding to cover new enrollees or risk losing all federal funding for preexisting Medicaid enrollees.
Justice Breyer then jumped into the fray, arguing that the states wouldn’t lose that old Medicaid funding for sure; rather, Congress said that states could lose that funding “at the discretion of the Secretary of Health and Human Services.” This is familiar language, he said, and the Court has never had reason to strike it down before now.
Mr. Clement pushed back, noting that the government has had every opportunity to say, “Fear not, states, if you don’t want the new money, then that’s all you’ll lose.” Yet they didn’t, and the fact of this power’s existence is inherently coercive.
Justice Sotomayor didn’t care for the idea that granting the states more of the federal government’s money also entitled the states to a greater say in how that money was used. Chief Justice Roberts noted that since the New Deal era, the states have become more dependent on the feds. Now, suddenly, they’re apprehensive about that dependence?
The Chief Justice also wished to know what was coercive: the huge amount of money the federal government was offering, or the “old” Medicaid money they were taking away?
Mr. Clement said both: no one in Congress wanted the states to refuse the new money and end the old program. Thus, they designed the terms in such a way that the states had no choice but to comply.
Interestingly, the Justices found the debate so engrossing that they allowed it to continue for an additional fifteen minutes. Those who said this would be an easy argument for them – and I admit, I may have been in that crowd – were very wrong.
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