Part 1: The War Among the States

All the briefs on ObamaCare’s gargantuan Medicaid expansion are in. I have dealt with the constitutional questions here  and here. Today and tomorrow, a few remarks on the political economy and the politics—in particular, the urgent need for sensible policymakers to prepare for a post-litigation world. The briefs shed a great deal of light on these matters.

Let’s start with an amicus brief by a dozen states in defense of Obamacaid. Its obvious purpose is to refute—by virtue of its submission, and almost regardless of its content—the plaintiff-states’ contention that ObamaCare impermissibly “coerces” the states to accede to the statute’s Medicaid expansion:  how can that be right, when quite a few of them welcome that expansion?

Constitutionally speaking, the probative value of the states’ submission is nil. Some states like to be “commandeered” by the feds. The attorneys general of New York or Iowa might not mind if Congress delegated to them the power to declare war on behalf of the United States. But so what? States  cannot by their consent enlarge the powers of Congress: see New York  v. United States (1992) and Printz v. United States (1997).

The pro-Obamacaid states’ constitutional arguments are merely bad; their pronouncements on the statute’s policy are a menace to a free and prosperous society. The gist is that Obamacaid is nothing new. From its beginnings, Medicaid has incentivized bold, progress-oriented states to cover “optional” populations and services above and beyond the federal mandates. Congress often responded by making those optional services mandatory for all states, while threatening potential opt-out states with a loss of all Medicaid funding.  Obamacaid owes its origin to that same state-demand-driven dynamic, and it has the same structure. It differs only in its unprecedented scale and generosity (as the feds will pay for virtually all of the program expansion).  Far from “coercion,” Obamacaid exemplifies our “cooperative federalism.”

Just so. And in a sane universe, public officials who embrace that form of government would be run out of town on a rail. Over four-plus decades, the cycle described by the pro-ObamaCare states has wrecked state budgets from coast to coast. With or without ObamaCare, Medicaid is on a hopelessly unsustainable path (link no longer available). Not that one would learn this from this gang.

By way of diametrical contrast, Paul Clement’s reply brief on behalf of the plaintiff-states, like his opening brief (link no longer available), presents a powerful indictment of Medicaid’s pernicious incentives. With each expansionary cycle, states get more ensnared, to the point of making an opt-out unthinkable. ObamaCare differs from earlier iterations (the briefs say) because it combines an unprecedented expansion with the individual mandate to purchase health insurance: if a state were to opt out, it would effectively turn poor citizens into lawbreakers. (On this theory, the mandate and the Medicaid expansion should fall together, and the reply brief says so.)

For reasons discussed in my earlier posts, I am skeptical that the plaintiff-states can prevail on this or any other theory of “coercion.”  In a practical sense, however, the more important consideration is the states’ and their lawyers’ devastating critique of Medicaid’s ruinous political economy. That critique will stand, and hopefully gain currency, regardless of the outcome of the litigation: Medicaid is going bust one way or the other. But the plaintiffs’ brief has a further, hugely important merit.

The coalition of plaintiff-states comprises most of the South; Great Plains and Mountain States; and some Great Lakes States (Wisconsin, Indiana, Ohio), along with Pennsylvania and Maine. All those states have consistently attempted to practice fiscal discipline or (like Ohio) recently come to their senses. The pro-Obamacare coalition, on the other hand, is composed of the nation’s leading deadbeats (California, New York, Illinois) and an assortment of Medicaid queens: Oregon, Vermont, Massachusetts, Connecticut, Delaware, Maryland, New Mexico, Hawaii.  And that is the federalism problem at the heart of the Medicaid litigation. The question isn’t about a “balance” between the imperious feds and the virtuous states. It is whether the most irresponsible, spendthrift states can drag the rest from one Medicaid expansion cycle into the next, yet-more ruinous round.

Paul Clement’s briefs suggest the point. But he cannot push too hard on it; he has to argue in the context of a federalism jurisprudence that, in its obsession over the feds’ relation to the “states as states,” is oblivious to the constitutional dimension of conflicts among them. That consideration, however, should loom very prominent in a sure-to-come post-litigation debate over Medicaid’s future. More on that subject tomorrow.