The Hole in the Whole

For some, National Federation of Independent Business v. Sebelius (the recent Supreme Court case upholding the Affordable Care Act, also labeled “Obamacare”) was about limits to what a governmental body could impose on individuals. They argued that nothing in the constitution could possibly mandate people to purchase products or services, from the over-used “broccoli” parallels to health insurance, and while the court agreed that this power did not reside in constitution’s grant to Congress of control over interstate commerce, writing for the majority, Chief Justice John Roberts did find justification for the “individual mandate” to have healthcare insurance in the taxing powers accorded to Congress. The decision was not, however, a total vindication of the statute.

There is another, mostly overlooked until now, provision of the court’s decision, one that focused on the Tenth Amendment’s relegation to the states of power over everything that the constitution did not grant to the federal government. This is a touchy fine line, but there have been some standards that effectively give the fed “bribing power” to get states to do what the feds want: “While the Supreme Court has made it clear many times that the federal government cannot command state governments to do anything, it has also upheld federal grants conditioned on compliance with federal dictates, so long as the penalty didn’t cross the line from ‘encouragement’ into ‘compulsion.’ The seminal case was South Dakota v. Dole (1987), in which the Court upheld a provision in the federal highway bill that allowed the Secretary of Transportation to dock 5 percent of a state’s federal highway funds if they refused to raise their drinking age to 21.” NationalReview.com, June 29^th

The part of National Federation of Independent Business that was most overlooked addressed the federal program aimed at providing healthcare for the poor – Medicaid – and how the Affordable Care Act purported to force states to take over a small portion of the overall burden (10%, but only after 2017) or lose the entire funding. The Roberts decision allows states to opt out of the new Medicaid provisions without penalty. “That ruling, experts say, could leave some of the poorest Americans in a ‘no-man’s land:’ Not covered by the federal entitlement program but not eligible for the subsidized health insurance… ‘Governors and state legislatures have a fundamental decision to make,’ said Sue Sherry, deputy director of Community Catalyst, a Boston-based think tank. ‘They have to decide whether they’ll provide basic health care to their poorest residents.’ ... The Medicaid expansion is expected to extend health insurance coverage to about 17 million Americans by 2019 by expanding the program to cover everyone below 133 percent of the federal poverty line (about $14,500 for an individual).” Washington Post, June 28^th.

Since the law created a mandate for people to carry healthcare coverage, sustained by the Supreme Court, Congress expanded Medicaid to pick up the tab for those who fell into the above-defined poverty level, providing subsidies for those at slightly higher levels of income. To cash-strapped states and those that will do anything to limit or restrict this statute that, this judicially-determined hole has become a cause célèbre among conservatives have seen a light at the end of their opposition tunnel – short of depending on electing federal officials who pledge to repeal the entire act.

Since the effective result of a state’s rejecting that provision would to leave its impoverished citizens without federal healthcare coverage, the only way to remedy this situation would be to pass the coverage 100% back to the federal government or provide more expensive state alternatives. However, since nothing remotely supportive of any of the president’s healthcare package could ever pass in a Congress where either Republican-controlled (through majority or filibuster) chamber chooses to oppose, the battle will move to the state legislatures, where decisions along party lines are to be expected.

Texas may well lead the charge: “Expanding Medicaid was the major portion of the health care law that the Supreme Court restricted in its decision, allowing states flexibility to opt out of the expansion without penalties. Thomas M. Suehs, the commissioner of the Texas Health and Human Services agency, said he remained concerned that expanding Medicaid without reforming it multiplied the costs the program put on states, adding that Medicaid already consumed a quarter of the state budget… As a result, many of the uninsured in Texas who would be eligible for coverage under the expansion remain in a state of limbo.” New York Times, June 29^th. “The financial burden would be higher on states that have traditionally had less expansive Medicaid programs. Texas, for example, only covers parents up to 26 percent of the Federal Poverty Line (about $2,900). The state would end up spending an estimated $2.6 billion on the coverage expansion between 2014 and 2019.” The Post.

Republican Governors in Kansas, Nebraska, South Carolina are already exploring this right to opt out now, while Wisconsin and Louisiana will at least wait to see the outcome of the November election before moving in that direction. There is potential a huge hole in healthcare looming, “leaving a huge question mark over the law’s mechanism for providing coverage to 17 million of the poorest people… In writing the law, Congress assumed that the poorest uninsured people would gain coverage through Medicaid, while many people with higher incomes would receive federal subsidies to buy private insurance. Now, poor people who live in a state that refuses to expand its Medicaid program will find themselves in a predicament, unable to obtain either Medicaid or subsidies.” The Post.

The law of unintended consequences might find those who will be disenfranchise should states opt out of coverage for the poor angry enough, and with nothing else to lose, willing to attack the system, violently if necessary. Class warfare? Others may simply move to states that have elected to remain in the Medicare system, placing a greater strain on state budgets in those states that support the legislation. Sure, workers in menial jobs might cause some disruption in the states unwilling to bear the Medicaid burden, but the state savings could be large. On the other hand, states where impoverished folks might move will be slammed.

California is likely to suffer greatly from such an effort, cannot discriminate against recent residents under the constitution and is already plagued by a hugely disproportionate share of this nation’s welfare recipients, an unfairness that has led California into crushing budget deficits and massive cutbacks in state programs. “Advocates of welfare reform in California often cite one, eye-popping statistic as they have pressed for cuts and changes to the [welfare] program in recent years: The state has one-eighth of the nation’s population but one-third of all welfare recipients.” BusinessWeek.com, December 11^th.

In these impaired economic times, increasingly there is a “every man for himself” mantra, an effective disavowal of our notions of Judeo-Christian charity at a national level, and the polarization that continues to split this country into intransigent factions suggests to some historians that we are witnessing the “beginning of the end” for this great country. Whether you are right, left or center, the unwillingness to compromise is a powerful vote against continuing in one amazing democratic experiment called the United States of America.

I’m Peter Dekom, and while compromise may seem like an anathema to many, for the United States learning to compromise is a question of our surviving as a nation.