Coercion (Part I)

Part of day three over the Supreme Court hearings on the Affordable Health Care for America Act (ACA – aka ObamaCare – Florida v. Health and Human Services) dealt with coercion. By definition the act of coercing is the use of force or intimidation to obtain compliance and or the use of force or the power to use force in gaining compliance, as by a government or police force.

Paul Clement argued on behalf of the states. The states argued that the Medicaid expansion is coercive because they have only two choices: expand eligibility or leave the Medicaid program. Because Medicaid is such a large part of the states’ budget, they claim that they cannot realistically walk away from the program. They further argue that the Constitution must be read to prohibit the federal government from coercing them. The states’ arguments turn on a provision that has been in the Medicaid statute since its initial passage in 1965 that says that if a state does not choose to expand to cover a new federally approved benefit, the Secretary of Health and Human Services (HHS) has the power to take all federal Medicaid money away from the state.

The Solicitor General, Donald Verrilli, argued on behalf of the federal government. The Obama administration argued that the even though it is very unlikely that the states will withdraw from the Medicaid program, the fact that they have a legal right to do so makes all the difference. If participation is voluntary, it cannot be coercive. In addition, the Solicitor General noted repeatedly that the ACA’s expansion of Medicaid is not fundamentally different from past expansions of the program.

It is unbelievable that there is no precedent for the government being found guilty of coercion against the states. One case brought up during deliberations was South Dakota v. Dole. In 1984, Congress enacted legislation ordering the Secretary of Transportation (Elizabeth Dole) to withhold five percent of federal highway funds from states that did not adopt a 21-year-old minimum drinking age. This case, South Dakota v. Dole, was decided before the Supreme Court and Dole won 7-2. Clement was quick to point out that the money amount that the government was going to withhold was very small in South Dakota v. Dole compared to Florida v. HHS. Clement stated that there must be some point (dollar amount) at which the government is being coercive against the states. In other words, the bigger the penalty (dollar amount) the more coercive the law is. It was also suggested that many states decided not to take any of the stimulus funds from the American Recovery and Reinvestment Act. This is true only because the federal government was telling the states exactly how to spend the money – coercion. Many states, such as South Carolina, were not allowed to use some of its stimulus funding were it would do the most help, such as to pay down its deficit hence, they declined the funding.

When pressured by Justice Breyer, Verrilli could not guarantee that the secretary of HHS would use the 1965 provision to withhold Medicaid funding from states who want to opt out of the ACA. However, there were no instances on record when the secretary of HHS ever did this, but Justice Roberts argued if it did happen in the past it is highly unlikely anyone would know about it.

Medicaid has grown faster than the Gross Domestic Product (GDP) and much faster than original congressional budget estimates. National health expenditures have gone from 5.2% of GDP in 1960 to 17.9% of GDP in 2009 and expected to approach 20% by 2019. Clement is right, at some point the courts must find this stranglehold the federal government has over the states as coercive. After all, when a program because so large it is impossible for states to say no even if the program is voluntary. What's worse, the federal government can change the rules of the ACA. For example, the secretary of HHS can decide the government will pay only 80% instead of 90% of all costs facing the states for Medicaid placing the rest of the cost burden on the states – how is this not coercion?