10.19.2021 0

Biden’s $3.5 trillion spending bill will force Medicaid expansion on 12 states including Texas and Florida

By Robert Romano

Editor’s note: this is the second in a series of stories from the Americans for Limited Government Foundation looking at the top ten most dangerous measures in the Biden-Schumer- Pelosi $3.5 Trillion “Wreck-conciliation” spending bill.

12 states that opted out of Medicaid expansion under the Affordable Care Act that passed in 2010 will now have it forced on them in President Joe Biden’s $3.5 trillion spending bill now being considered by Congress under budget reconciliation that also creates new entitlements in education and child care, according to the proposed legislation, expanding the program into those states including Texas and Florida.

Under Obamacare, Medicaid expansion was originally supposed to be mandatory on the states, but the 2012 Supreme Court ruling, National Federation of Independent Business v. Sebelius, overturned that aspect of it, ruling it was not a constitutional exercise of Congress’ spending power because it would have imposed a take it or leave it provision by ending all Medicaid funding if a state chose not to expand, effectively imposing its will on state legislatures by forcing them to pass a new law and increase spending.

Chief Justice John Roberts wrote, “the expansion accomplishes a shift in kind, not merely degree. The original program was designed to cover medical services for particular categories of vulnerable individuals. Under the Affordable Care Act, Medicaid is transformed into a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level. A State could hardly anticipate that Congress’s reservation of the right to ‘alter’ or ‘amend’ the Medicaid program included the power to transform it so dramatically. The Medicaid expansion thus violates the Constitution by threatening States with the loss of their existing Medicaid funding if they decline to comply with the expansion.”

Now, almost a decade later, the Biden administration once again wants to impose Medicaid expansion on states, but this time, the plan is for the federal government to simply to offer Medicaid to those who would have otherwise qualified had a state expanded. States will not have to do anything additional to expand Medicaid. Therefore, the new proposal is designed to do an end run around the 2012 Roberts ruling.

It would, by 2025, create a new federal Medicaid program directed at residents in states that have not adopted Medicaid expansion. Those are Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Texas, Wisconsin and Wyoming, and could apply to upwards of 4 million individuals.

Before 2025, the bill simply offer individuals increased premium and cost-sharing subsidies to certain policies on Obamacare exchanges.

Now, surely, if it is passed, it would face federal challenges in court. The devil of course will be in the details. Opponents might have to wait until 2025 to mount a challenge on the law’s actual implementation of Medicaid expansion, depending on how the regulation is structured. The increased exchange subsidies in the interim would likely be upheld since exchange subsidies have already been upheld in the 2012 ruling.

In the meantime, existing financial incentives passed by Congress to expand Medicaid in the 12 states, including under the $1.9 trillion stimulus that President Biden signed into law, will remain in effect, hinting that Democrats’ end goal is still for these remaining states to expand Medicaid, probably by creating a political constituency within those states for the benefit that will be more difficult for Republicans to repeal when they find themselves with Congressional majorities in the future, perhaps as soon as the 2022 midterms, who may wish to zero out the new exchange subsidies.

When the law does finally come up in courts, assuming the legislation passes, the issue will be whether the federal government can constitutionally force new health care and welfare programs on a state that doesn’t want them. Stay tuned.

Robert Romano is the Vice President of Public Policy at Americans for Limited Government.

Copyright © 2008-2021 Americans for Limited Government