According to legal analysts, the recent U.S. Supreme Court decision on the federal health-care law could have significant implications for other federal aid programs and legislation passed under Congress’ spending power. This aspect of the ruling could potentially encourage states to challenge education laws and other federal programs. The Supreme Court ruled 5-4 to uphold a key provision of the Affordable Care Act, which requires individuals to purchase a health insurance policy. The court determined that this was a valid exercise of Congress’ taxing power. However, the court also ruled 7-2 that states could not be threatened with the loss of their existing Medicaid funding if they refused to participate in the expansion of the federal health-care program for the poor. This part of the decision could open the door to lawsuits over the conditions attached to federal programs, including those under the No Child Left Behind Act.
Samuel R. Bagenstos, a law professor at the University of Michigan, referred to this decision as a "very big deal" and predicted that there will be a lot of challenges to the constitutionality of federal spending statutes and conditions. In the Supreme Court’s opinion on the health-care case, Chief Justice John G. Roberts Jr. stated that Congress had put "a gun to the head" of the states by forcing them to add more individuals to the Medicaid rolls. Medicaid funding makes up a significant portion of state budgets, with federal funds covering a large portion of the costs. The Chief Justice emphasized that while Congress can use its spending power to incentivize states, it crosses a line when pressure becomes compulsion and goes against the system of federalism.
Justices Stephen G. Breyer and Elena Kagan agreed with the chief justice’s opinion on these points, while Justices Antonin Scalia, Anthony M. Kennedy, Clarence Thomas, and Samuel A. Alito Jr. wrote an opinion stating that the Medicaid expansion, along with the rest of the health-care law, was unconstitutional. In this way, they helped form a majority decision on the issue of state coercion.
Chief Justice Roberts, however, mentioned that the Medicaid expansion could be saved by preventing the federal government from withholding existing Medicaid funds from states that do not comply with the expansion. The government could still condition new Medicaid funding on accepting the expansion.
Justice Ruth Bader Ginsburg, joined by Justice Sonia Sotomayor, agreed with this effort to save the Medicaid expansion but would have allowed the federal government to withhold existing Medicaid funds. Congress has the power to attach conditions to federal grants based on the spending clause in Article I of the Constitution, which allows Congress to "provide for… the general welfare of the United States." However, there are limits on attaching conditions to federal aid, including the requirement that the conditions must be clear and related to federal interests. Congress cannot go beyond the point of compulsion in pressuring states to comply.
In a joint minority opinion, Justices Scalia, Kennedy, Thomas, and Alito referred to a dissent by Justice Kennedy in a 1999 decision regarding school district liability for peer sexual harassment. This dissent expressed concerns about the spending-clause power potentially infringing on the balance between federal and state authority.
The court’s conservative justices often express federalism concerns in relation to the federal role in education. The joint opinion of the four conservatives reflects a hypothetical scenario raised by Justice Alito during the health-care case’s oral arguments. This hypothetical scenario resembles the Obama administration’s Race to the Top program, which offers grants to states that embrace certain education priorities. The conservatives suggest that if Congress offered states a grant equal to their entire annual spending on K-12 education, but with conditions governing various aspects of education, the states would face a difficult choice. They could refuse the grant but still have to pay taxes to fund education without federal aid, or they could accept the grant and surrender their traditional authority in education.
Chief Justice Roberts did not address this point raised by the conservative justices, but Justice Ginsburg did. She questioned the idea that clear notice of conditions must be provided at the time a state receives federal funds. She cited a Supreme Court decision from 1985 to support the notion that conditions on federal funds must be unambiguously clear when the state uses the money, not when the law establishing the program was passed.
Justice Ginsburg anticipated that the Medicaid decision would lead to more challenges based on the spending clause and wondered how litigants and judges would assess a state’s choice to accept federal conditions in exchange for funds.
Justices Scalia, Kennedy, Thomas, and Alito expressed their belief that the Medicaid expansion was coercive. They emphasized that Medicaid is the largest federal program providing aid to the states, with the federal contribution covering almost two-thirds of total Medicaid spending. Following Medicaid, they highlighted federal aid for elementary and secondary education, which constitutes 12.8 percent of total federal outlays to the states.
During a rally for immigrants and refugees at the State House in Concord, Fartun Sengow, a Somali immigrant now residing in Concord, expressed her response to the U.S. Supreme Court’s ruling on Arizona’s immigration law. The court invalidated key provisions of the law.
The four justices stated that the offer made by the health-care law to the states, which involved expanding Medicaid or potentially losing all federal Medicaid funding, was unlike anything seen in previous cases involving spending power. Neal Katyal, a Washington lawyer who previously served as the acting U.S. solicitor general and defended the health-care law in lower courts, agreed with Justice Ginsburg’s prediction that challenges to other federal laws were likely. He saw this ruling as opening up a new avenue for litigation that was previously hypothetical.
Ilya Somin, an associate law professor at George Mason University, deemed it significant that the court had struck down part of a statute for exceeding Congress’ powers under the spending clause, something that had not occurred in 75 years. However, Mr. Somin, a libertarian who had opposed the law, noted that the opinion left several unanswered questions. For example, it was unclear how much money was necessary for something to be considered coercive, and when a program could be considered new. Chief Justice Roberts, in his opinion, did not establish a clear dividing line.
There are still several issues to be resolved. Mr. Bagenstos of the University of Michigan pointed out that federal education laws, such as the ESEA, frequently undergo reauthorizations and revisions, leading to uncertainty about when conditions are initially imposed. Furthermore, there are other federal laws, like Title IX, that have conditions on the states, but are not grant programs in themselves; they are anti-discrimination statutes. Under these statutes, the rules are not tied to specific funds. Mr. Bagenstos doesn’t expect the state challenges to ultimately be successful, but he believes that the Medicaid ruling could impact state-federal relations regarding federal waivers for the No Child Left Behind Act. States could threaten legal action if their waivers are denied.
While Mr. Bagenstos doesn’t believe these arguments will succeed in court, he acknowledges that they will take time to navigate through the legal system.
Author
