Medicaid is an American benefit program that provides health insurance coverage to economically disadvantaged people, covering one in five low-income Americans. Medicaid is administered by states according to federal guidelines, and is jointly funded by federal and state governments. Although states must follow federal guidelines, states have significant discretion in determining which optional benefits to cover; eligibility standards; and the type, amount, duration and scope of services — people eligible for Medicaid in one state may not be eligible in another state, as services differ greatly from state to state. However, if states don’t comply with federal requirements, the Secretary of Health and Human Services can withhold a state’s federal matching funds.
The Patient Protection and Affordable Care Act, a landmark piece of healthcare legislation alternatively known as Obamacare or the ACA, was signed by President Obama into law in 2010. The law has been controversial since its passing, but according to Kimberly Amadeo at The Balance, negative messages about the ACA have outnumbered positive messages 15 to one. This is because three to five million people lost their employer-sponsored health insurance because the penalty enumerated in the ACA for not covering employees was lower than the cost of providing employees insurance. In addition, private health insurance companies cancelled many of their plans because their policies did not cover all 10 of the ACA’s essential benefits, which include treatment for mental health, addiction, and chronic diseases.
Despite these effects, the ACA slows rising healthcare costs by making preventative care free. Many Americans, especially low-income Americans, would wait until they absolutely had to go to the emergency room for basic medical procedures or ails to save money. The ACA’s inclusion of preventative care combated the most expensive care costs — like hospital care — by by keeping people healthy and catching preventable chronic diseases early on. Although the ACA’s 10 essential benefits have cost some people on private plans, without these benefits, many would end up in the emergency room. Some people oppose the ACA because it appeared to increase overall healthcare costs in the short term; however, that increase was due to the surge in first-time health care registrations, as people took advantage of qualifying for affordable care for the first time. Moreover, Obamacare required that companies do not deny people for pre-existing conditions, eliminated lifetime and annual coverage limits, and allowed children to stay on their parents’ health insurance plans until age 26. It also taxed those who choose not to purchase insurance and raised the income tax rate for people with incomes above $200,000. One of the most contentious aspects of the ACA is that forcibly expanded Medicaid eligibility to all non-Medicare eligible individuals under the age of 65 with incomes up to 133 percent of the Federal Poverty Level — before the ACA, this was up to state discretion. This mandatory expansion of Medicaid at the state level was challenged before the Supreme Court.
After constitutional challenges from Florida and 25 other states and a number of business and special interest groups, the ACA arrived before the Supreme Court in the form of National Federation of Independent Business v. Sebelius. The highest court in the land upheld many of the law’s major provisions, including the individual mandate to purchase health insurance. The most complex part of the ruling surrounded the original method by which Medicaid was to be expanded in the ACA, which caused a rift between red-leaning states and the federal government over states’ rights. In the original statute, the Secretary of Health and Human Services could, in effect, force states to adopt Medicaid expansion by withholding part or all of federal matching funds to operate the program in the state.
Precedent before the case seemed to indicate that Congress was able to decide the terms dictating how the states used federal funds as long as it was “related to the general welfare, stated unambiguously, clearly related to the program’s purpose, and not otherwise unconstitutional.” In NFIB v. Sebelius (2012), Chief Justice Roberts’ majority opinion found that “a federal condition on a grant to states was unconstitutionally coercive” because states “lacked adequate notice to voluntarily consent and the Secretary could withhold all existing Medicaid funds” — an unconstitutional ultimatum from the federal government. Roberts chose to cut this enforcement provision out of the ACA, leaving behind an opt-in expansion system for Medicaid.
Although Medicaid had been expanded in the past to cover new groups, the Court ruled that past Medicaid expansions different dramatically from the ACA expansion. Prior expansions forced Medicaid to include more federal minimum requirements, especially for children, pregnant women, and disabled people. Congress has also required Medicaid to offer a cost-sharing system for low-income Medicaid beneficiaries and help pay for premiums, and these expansions were not deemed unconstitutional. The Roberts Court ruled that the ACA expansion increased state obligations drastically relative to these prior changes, shifting it from “no longer a program to care for the neediest but rather an element of a comprehensive national plan to provide universal health insurance coverage.” Although Justices Ginsburg and Sotomayor argued that the ACA expansion simply expanded health coverage to a greater swathe of America’s poor, their arguments fell on deaf ears among the court’s conservative majority.