Over many decades, Congress has enacted scores of programs that are largely managed by states, with the help of federal funding. But the funding comes with strings -- conditions the government imposes as a backstop to make sure states don't abuse or misuse the funds. According to legal scholars, the ability to place these conditions has not been questioned by the judicial branch. Medicaid is one such program, and has over time been expanded to cover new populations, something the statute permits. The Affordable Care Act expands it some more, to further widen coverage.
Indeed, the new Medicaid requirement is expected to cover about 17 million Americans, constituting about half of ACA's coverage expansion.
The 26 Republican-led states essentially argue that the law "coerces" them to accept the Medicaid expansion against their will, because if they opt not to, they'll lose all Medicaid funding. This, they say, is an unconstitutional use of federal power.
"While some individuals are exempt from the penalties designed to enforce the mandate, no state is exempt from the massive penalty -- the loss of the entirety of funding under the single largest grant-in-aid programs for the states -- and so Congress did not even contemplate the possibility of a state opting out of Medicaid," Paul Clement, the attorney representing the plaintiffs, wrote in his brief.
If the Supreme Court agrees, it could call into question a litany of federal programs.
"The states are raising a very radical idea here, that the federal government cannot impose conditions when it gives money to the states," Jost said. The logical conclusion, he argued, is that it "basically turns every federal program into a block grant. We just give you the money and God bless you, you figure out what to do with it. And that calls into question not only Medicaid but federal education programs, transportation programs, environmental programs, civil rights laws, virtually everything the federal government has done in cooperative programs with the states since the New Deal."
We explored the immense implications of this argument here.
The focal point of the Supreme Court challenge to the Affordable Care Act will be whether the federal government can require Americans to buy health insurance. The Medicaid challenge is a separate piece of the GOP states' lawsuit -- one that proponents of health care reform see as a political exercise to try and wipe out as much of the law as possible in a single blow. Many legal experts and even health care stakeholders were surprised the Supreme Court even agreed to take hear this part of the states' argument. Few expect it to be struck down, regardless of the ruling on the individual mandate.
Ron Pollack, executive director of the consumer advocacy group Families USA, said at the time that he was "surprised and troubled that the court has decided to review the states' objections to the Affordable Care Act's expansion of Medicaid." The law allows non-seniors within 133 percent of the poverty line to enroll in the safety-net program.
While precedents conceptually support the constitutionality of the law's individual mandate as well, its breadth makes it less of an open-and-shut case than the Medicaid component, which scholars say falls well within the confines of settled law.
Though the Medicaid expansion is being evaluated on its own merits, it might also fall in the unlikely event that the high court strikes down the individual mandate, and then rules that the rest of the law is "inseverable," and must fall as well.