Wednesday, November 23, 2011

New York Times' editorial on State Rights argument in the Health Care Reform debate


Health Care and the States

In reviewing the constitutionality of health care reform, the Supreme Court said it would consider the legality of the Medicaid expansion included in the reform law. The question seems narrow, but it could have significant implications for redefining Congress’s spending power.
The only appellate court that even addressed this question, the United States Court of Appeals for the 11th Circuit, rejected the constitutional challenge. Having taken up the question, the Supreme Court should affirm that ruling. It would be a serious mistake for the court to use this case to restrict Congress’s authority by placing any additional requirements for the commitment of federal money.
The Constitution’s spending clause gives Congress the power to pay debts and “provide for the common defense and general welfare” of the country. In 1987, the Supreme Court held that when Congress provides money to a state, it has broad power to require states to meet conditions related to the money — as long as the spending serves the general welfare and meets other restrictions.

The health care reform law does just that. In expanding the number of people eligible for Medicaid and raising the minimum coverage, it requires states to pay for 10 percent of the added cost or else lose all federal financing for Medicaid. As the 11th Circuit said, Congress made clear when Medicaid was passed in 1965 that it reserved the right to change the program. It has done so many times without any court striking down any change as coercive.
The health law gives states until 2014 to decide whether they will adopt the expansion and develop new budgets to finance a program replacing Medicaid. “If states bear little of the cost of expansion,” the appeals court said, then “the idea that states are being coerced into spending money in an ever-growing program seems” overblown.
The coercion argument, which is a favorite of states’ rights proponents, rests on the premise that Congress’s power under the spending clause is by definition quite limited. That erroneous idea held sway on the Supreme Court in the 1930s before it was discredited. If it accepts the coercion argument now, the Supreme Court would basically usurp Congress’s authority to determine the nature and scope of federal spending for the general welfare.
This issue matters because a lot of major federal laws carry conditions that apply to the states and other institutions. For example, any state receiving federal funds — whether for agriculture or housing — is prohibited from discriminating on race, color or national origin under the Civil Rights Act. Likewise, any education institution that accepts federal funds cannot discriminate based on gender under Title IX of the federal education law. While some forms of discrimination are prohibited by the Constitution, these federal statutes impose additional duties of enforcement and spell out penalties for not complying.
Curbing Congress’s power to impose conditions on the disbursement of federal money would upend settled precedent. Such a move by the court would invite litigation and uncertainty that would harm all governments, federal and state.

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