Arguments Blog
Monday, Jun 9, 2014, 9:45 AM

The Supreme Court’s Health-Care Legacy

Nathan Pippenger

Annie Lowrey has a terrific piece on health-care access in Texarkana, the small town straddling the Texas-Arkansas border. Because of the Supreme Court’s decision to allow states to reject the Affordable Care Act’s Medicaid expansion, the poor on the Arkansas side now have access to health care, while those on the Texas side are living like this:

Ms. [Janice] Marks had a hole in her tooth this winter, she said, and went to the emergency room. They gave her a painkiller and a bill for $600, which she has ignored. The tooth remains so damaged that she can chew on only one side of her mouth.

“I know it’s past due,” she said in response to the letters the hospital has sent her. “But I can’t just pay y’all $600. I don’t have $600.”

It’s important to understand the legal reasoning that has created this situation. Janice Marks is not unemployed—she works the night shift at Walmart—but she nonetheless lives in a homeless shelter. And as Lowrey’s piece explains, “until the Supreme Court ruling, the Obama administration had intended for the Medicaid expansion in the Affordable Care Act to be universal, covering all adults earning up to 133 percent of the federal poverty line, about $15,500 annually for a single adult or $32,000 for a family of four.” So why did the Court grant Texas the ability to freeze out people like Marks? The answer lies in Medicaid’s hybrid form of state-federal design. As Chief Justice Roberts put it, the federal government’s threat in the ACA—that existing Medicaid funding could be taken away if states did not comply with the expansion—amounted to “economic dragooning” (despite the fact that the feds are providing nearly all of the money for the expansion), because Medicaid is a uniquely huge part of state budgets. As Roberts went on to argue, even though “the States agreed that Congress could change the terms of Medicaid when they signed on in the first place,” this particular expansion of the program “accomplishes a shift in kind, not merely degree.” To wit: according to Roberts, the ACA “transformed” Medicaid from a program for the very poor “into a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the federal poverty level.” As a result, “it is no longer a program to care for the neediest among us, but rather an element of a comprehensive national plan to provide universal health insurance coverage.”

The most striking thing about this ruling is its nonchalant vagueness. The Chief Justice, who assured Congress during nomination hearings that he would merely serve as an umpire, decided that expanding Medicaid beyond a certain point has the effect of changing it “in kind.” The basis for this assertion remains mysterious: it’s rooted, somehow, in Roberts’s distinction between Medicaid-as-program-for-the-needy and Medicaid as “an element of comprehensive national plan to provide universal health insurance.” But is providing health insurance for the needy not a part of providing health insurance to everybody? These are hazy distinctions, and precisely because their legal foundations are so vague, they spell trouble for the future of many federal programs that John Roberts or other justices might deem “coercive”—not just Medicaid.

The trap laid in that decision could, in the long run, lead to a similar kneecapping of many other programs that combine federal dollars with state implementation. (Scholars are still trying to figure out what rules, exactly, Roberts laid down in his ruling.) Already, it’s had the effect of blocking health insurance to about eight million people, on the grounds that they’re not so poor that they would have been countenanced as potential beneficiaries under the original Medicaid law. According to Roberts, any benefit these people might have received under Obamacare would not have been from a program designed for the poor, but from one that was categorically different—a universal-coverage scheme that went beyond mere help for those Roberts calls “the neediest among us,” breaking the tacit deal the feds had made with the states to help these people and not others.

The story of Janice Marks demonstrates what a farcical distinction this has turned out to be in practice. Marks lives in a homeless shelter in Texas. If she lived in a homeless shelter in Arkansas, she’d have healthcare—but not, according to John Roberts’s ruling, because she’s poor: rather, because Arkansas decided to participate in a program now different in kind, a “comprehensive national plan to provide universal health insurance coverage” which, thanks to him, is no longer so comprehensive. Of course, as Roberts would surely acknowledge, Marks is poor regardless of which side of the border she lives on. And if the federal government had been allowed to maintain its funding leverage, states that currently don’t offer Medicaid at all to childless adults would have gone along with the expansion, bringing Medicaid to a lot of those poor people as well—Americans making considerably less than the new cap of $15,500 a year. Right now, adults without dependent children aren’t eligible for Medicaid in Texas. The income eligibility limit for a family of three is less than $4,000.

These are people who would have been included if Texas had expanded Medicaid under the ACA. Once you include them, it becomes clear why “expansion” can be a misleading term. Yes, raising the income cap for Medicaid eligibility to a whopping $15,500 “expands” the program to a slightly better-off group of people. But many of the people who would have benefited from Medicaid expansion make much less than $15,500—they just happen to live in states where adults without dependent children aren’t eligible for the program, or where the cutoff for parents is so low that practically any income blocks you from enrolling. Including these extremely poor people in Medicaid is, to be sure, an expansion in the program’s numbers, but it hardly transforms the basic nature of the program, as Roberts suggests, from one designed for the needy to something essentially different. This fact gives lie to the idea that expanding Medicaid would have transformed it into something “different in kind.” It could have become a lifeline for Janice Marks, who continues to chew with just one side of her mouth because she can’t pay a $600 dental bill. Just imagine if she were one of the neediest among us!

 

 

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