If Obama is re-elected, health care law debate likely moves to states

Posted on January 1, 0001 12:00 AM

The political battle over the Patient Protection and Affordable Care Act will continue in Congress and on the presidential campaign trail, but if President Obama keeps his current lead and is re-elected, the battle seems likely to move to the states. Congressional Republicans said they would keep moving to repeal the law, but they do not have the votes to override a presidential veto. That makes the November election a sort of referendum on the law.

While the Supreme Court upheld the law's individual mandate to buy health insurance or pay a penalty, starting in 2014, it struck down a key provision for expanding coverage through the Medicaid program. It said the federal government can't take away states' current Medicaid funding if they refuse to participate in the expansion. That is "a gun to the head," Chief Justice John Roberts wrote in the 5-4 majority opinion.

The decision means that "A state can refuse to participate in the expansion without losing all of its Medicaid funds," Kevin Russell writes on SCOTUSblog. "Instead the state will have the option of continue the its current, unexpanded plan as is. Read more

"The Medicaid provision is projected to add nearly 30 million more people to the insurance program for low-income Americans -- but the court's decision left states free to opt out of the expansion if they choose," MSNBC's Tom Curry writes. The law requires states in 2014 to cover adults with incomes at or below 133 percent of the federal income threshold definition of poverty, now $14,856 a year for single adults. "Many states now cover adults with children only if their income is considerably lower, and do not cover childless adults at all," Roberts noted.

The chief justice said it is not constitutional to "penalize states that choose not to participate in that new program by taking away their existing Medicaid funding," because the law transforms Medicaid into a more general health program. "The threatened loss of over 10 percent of a state's overall budget is economic dragooning that leaves the states with no real option but to acquiesce in the Medicaid expansion."

Liberal justices Stephen Breyer and Elena Kagan joined conservative Roberts in that part of his opinion. The other liberals, Ruth Bader Ginsburg and Sonia Sotomayor, said the administration does have the right to withhold Medicaid money if a state doesn't follow the new rules, and said this was the first time that the court had ever found "an exercise of Congress' spending power unconstitutionally coercive." However, Ginsburg wrote in their concurring opinion that a majority of the court (all but Breyer and Kagan) "buys the argument that prospective withholding of funds formerly available exceeds Congress' spending power. Given that holding, I entirely agree with the chief justice as to the appropriate remedy" — banning the withholding of Medicaid funds, "not, as the joint dissenters would have it, to scrap the expansion altogether."

While polls have never shown that a majority of American adults favored the law, majorities favor its major components, the exception being the individual mandate.

Will states that challenged the law as unconstitutional also refuse to expand their Medicaid programs? Not necessarily. Matthew Yglesias of Slate explains the workings of Medicaid: "The more a state spends, the more the federal government kicks in—but you get diminishing returns in terms of how much extra money you can get. So the upshot is that a stingy, conservative state can expand for cheaper at the margin than can a generous liberal state." (Read more)

John Barro of Bloomberg News notes that some reform advocates "worry that states will opt out and low-income people in conservative states will be left without coverage. But I think we will have expanded Medicaid in all 50 states in pretty short order," because the federal government will pay "100 percent of it in the early years, gradually declining to 90 percent. That's a pretty big carrot. States that refuse to expand Medicaid will be rejecting nearly free federal money. Such a rejection would be tantamount to saying that government health insurance for low-income people is so undesirable that a state is not even willing to pay ten cents on the dollar for it." ( Read more)

Stateline notes that Wisconsin Gov. Scott Walker said his state "will not take any action to implement Obamacare," so that could play in his 2014 re-election bid, and theBirmingham Business Journal said "opting out of the Medicaid expansion seems increasingly likely for Alabama." Mary Orndorff, who covers Washington for Alabama's largest newspapers, writes that nearly 1 million people in that state "get their health care through Medicaid and the expansion could increase that by more than 500,000 people. In other words, the state would go from 21 percent of its state population eligible for Medicaid to about 40 percent. . . . Alabama officials had expressed concern that the expansion is something the state cannot afford, estimating that administrative costs alone would rise by $389 million." ( Read more)

It's also likely that this year's presidential candidates will continue to spin the truth about the Affordable Care Act to suit their needs,reports The Annenburg Public Policy Center's FactCheck.org. Both Obama and Romney "wasted little time in taking to the airwaves to rehash plenty we've fast-checked before," the website writes. Obama was quoted as saying workers will be able to keep their current plans, but "at least a few million" won't be able to keep employee-sponsored plans under the new law. He was also caught exaggerating the benefits of the law. Meanwhile, Romney "repeated a number of distortions," including the law would cut Medicare by $500 billion and add trillions to the deficit.

Al Cross is a long-time journalist who directs the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky. He writes The Rural Blog.