Opinion ID: 2752180
Heading Depth: 3
Heading Rank: 2

Heading: The joint dissent's approach

Text: The joint dissent's analysis of the constitutionality of the Medicaid expansion differed significantly from that of the plurality. The primary8 focus of the joint dissent was on the concept of coercion, which it defined simply: [I]f States really have no choice other than to accept the package, the offer is coercive, and the conditions cannot be sustained under the spending power. Id. at 2661 (Scalia, Kennedy, Thomas & Alito, JJ., dissenting). The Justices cautioned, however, that courts should not conclude that legislation is unconstitutional on this ground unless the coercive nature of an offer is unmistakably clear. Id. 8 The joint dissent also noted that conditions attached to grants must be unambiguous, must be related to the federal interest in particular national projects or programs, and may not induce the States to engage in activities that would themselves be unconstitutional. NFIB, 132 S. Ct. at 2659 (Scalia, Kennedy, Thomas & Alito, JJ., dissenting) (citations omitted) (internal quotation marks omitted). These criteria support the constitutionality of § 1396a(gg) here. -17- at 2662. Emphasizing that Medicaid constitutes the largest line item in states' budgets, as well as the apparent view of Congress that no state would refuse to participate in the new Medicaid program expansion, the joint dissent concluded that the expansion exceeded Congress's power under the Spending Clause. Id. at 2662–66. B. Application of NFIB to the Disapproval Here Based on § 1396a(gg) When a majority of the Supreme Court agrees on a result but no single rationale explaining the result enjoys the assent of five Justices, 'the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds . . . .' Marks v. United States, 430 U.S. 188, 193 (1977) (quoting Gregg v. Georgia, 428 U.S. 153, 169 n.15 (1976) (plurality opinion)). In NFIB, the plurality invalidated the Medicaid expansion on narrower grounds than did the joint dissent. The plurality found a Spending Clause violation because it determined that the Medicaid program expansion was an entirely new program, participation in which was a condition on continued receipt of pre-ACA Medicaid funds, and because the loss of pre-ACA Medicaid funds would have been so consequential to the states that states had no real option to refuse. In other words, the plurality found (1) that the expansion placed a condition on the receipt of funds that did not govern the use of those funds and (2) that the condition was unduly coercive. The joint dissent, in contrast, -18- would have invalidated the expansion based on a finding of coercion alone. Hence, the plurality's rationale was narrower. See E. Pasachoff, Conditional Spending After NFIB v. Sebelius: The Example of Federal Education Law, 62 Am. U. L. Rev. 577, 593-96 (2013); cf. S. Bagenstos, The Anti-Leveraging Principle and the Spending Clause After NFIB, 101 Geo. L.J. 861, 873 (2013) (rejecting the proposition that the plurality's analysis relied only upon the size of the grant at issue). Thus, we apply the plurality's approach to § 1396a(gg). Under that analysis, Maine DHHS's Spending Clause challenge fails. Indeed, the plurality opinion precludes us from finding that there is a Spending Clause problem with § 1396a(gg). The MOE provision applied to the long-standing provision of care to 19- and 20-year-olds, unlike the new Medicaid program expansion first appearing in the ACA, is not a new program. It is simply an unexceptional alter[ation] . . . [of] the boundaries of the categories of individuals covered under the old Medicaid program, completely analogous to the many past alterations of the program that NFIB expressly found to be constitutional. See NFIB, 132 S. Ct. at 2606. Section 1396a(gg) differs from the new program expansion considered in NFIB in several critical ways. As an initial matter, § 1396a(gg) does not expand Medicaid eligibility at all. It simply requires a state, as a condition of continued participation -19- in Medicaid, to maintain its Medicaid eligibility standards for children for nine years. See 42 U.S.C. § 1396a(gg)(2) (MOE provision applies to the eligibility standards, methodologies, and procedures . . . that are applicable to determining the eligibility for medical assistance of any child who is under 19 years of age (or such higher age as the State may have elected)). As NFIB noted, the Medicaid expansion require[d] States to expand their Medicaid programs by 2014 to cover all individuals under the age of 65 with incomes below 133 percent of the federal poverty line and establishe[d] a new '[e]ssential health benefits' package. 132 S. Ct. at 2601 (citing 42 U.S.C. §§ 1396a(a)(10)(A)(i)(VIII), 1396a(k)(1), 1396u–7(b)(5), 18022(b)). What is more, § 1396a(gg) requires states to maintain eligibility standards for a population -- low-income children of certain ages -- that has historically been covered by Medicaid. Maine DHHS admits in its argument that the classic form of Medicaid provided coverage for the blind, the disabled, the elderly, and needy families with dependent children. In fact, the Medicaid program has an extensive history of covering 18- to 20-year-olds. At the time of Medicaid's enactment in 1965, the program included some 19- and 20- year-olds within the population of children that states had to cover. It did so first by requiring states to match the coverage of social assistance programs like Aid for Families with Dependent Children (AFDC), which defined eligible children -20- to include 19- and 20-year-olds in particular educational programs. See 42 U.S.C. § 606(a) (1964) (providing that AFDC was available to any dependent child, defined as a needy child (1) who has been deprived of parental support or care . . . and who is living with [one of several enumerated relatives] . . ., and (2) who is (A) under the age of eighteen, or (B) under the age of twenty-one and . . . a student regularly attending [certain educational programs]); Social Security Amendments of 1965, Pub. L. No. 89-97, sec. 121(a), § 1902(a)(10), 79 Stat. 286, 344-45 (codified at 42 U.S.C. § 1396a(a)(10) (1969)) (A state plan for medical assistance must . . . provide for making medical assistance available to all individuals receiving aid or assistance under State plans approved under [AFDC] . . . .). The Medicaid program also mandated that states provide medical assistance to all under-21 individuals who would have qualified as children for AFDC but for their age, thus removing the educational condition that limited the class of 19- and 20-year-olds covered under AFDC. See id. §§ 1902(b), 79 Stat. at 348 (codified at 42 U.S.C. § 1396a(b) (1969)); see also id. § 1904, 79 Stat. at 351 (codified at 42 U.S.C. § 1396d(a)(i) (1969)). Thus, from its early days, Medicaid contemplated mandatory coverage of some 19- and 20-year-olds, due to their status in federal law as children in need. Such a mandatory coverage requirement was in place when Maine joined Medicaid in 1966. The mandate to cover -21- children under 21 who would qualify for AFDC but for their age did not become optional until more than a decade later. See Omnibus Budget Reconciliation Act of 1981, Pub. L. No. 97-35, § 2172(b)(1), 95 Stat. 357, 808 (1981) (codified at 42 U.S.C. § 1396d(a)(i)); id. § 2172(a), 95 Stat. at 808 (codified at 42 U.S.C. § 1396a(b) (1983)). There is an additional relevant point. The category of children for which a state must provide coverage has remained subject to expansion throughout the history of Medicaid. Alterations to the category of needy children occurred repeatedly in the 1980s, with states being required to cover an expanding group of children based on changing age and income requirements. Importantly, in 1990, Congress required states to cover all 18-year-olds who met certain income eligibility requirements, irrespective of their dependent status. Omnibus Budget Reconciliation Act of 1990, Pub. L. No. 101–508, § 4601(a)(2), 104 Stat. 1388, 1388-166 (1990) (codified at 42 U.S.C. § 1396d(n)(2)); id. § 4601(a)(1)(A), 104 Stat. at 1388-166 (codified at 42 U.S.C. § 1396a(a)(10)(A)(i)(VII)). In this way, children aged 18 -- historically treated by AFDC and Medicaid in the same manner as children under 21 -- thus became included in the mandatorily covered category without any condition other than their income level. That is so even though 18-year-olds are for many other purposes, including voting, treated as adults rather than children. -22- The history of Medicaid's treatment of 18-, 19-, and 20-year-olds further demonstrates that application of § 1396a(gg) here as to the treatment of 19- and 20-year-olds accomplishes a shift in . . . degree, rather than in kind. NFIB, 132 S. Ct. at 2605; see also id. at 2606 (noting that a Medicaid amendment requiring States to cover pregnant women and increasing the number of eligible children . . . . can hardly be described as a major change in a program that -- from its inception -- provided healthcare for 'families with dependent children' (emphasis added)).9 Two further differences between the MOE provision and the new Medicaid program expansion considered in NFIB support the conclusion that the MOE provision did not accomplish a shift in kind. First, the MOE provision uses the same pre-existing funding mechanism as pre-ACA Medicaid, whereas the expansion uses a new, more generous federal funding mechanism. Second, under § 1396a(gg), Maine is required only to maintain its current benefits for 19- and 20-year olds, whereas the Medicaid expansion required states to provide a new '[e]ssential health benefits' package . . . to all new Medicaid recipients. NFIB, 132 S. Ct. at 2601 (first alteration in original). The NFIB Court explicitly mentioned both of these features of the expansion in its analysis. 9 The pregnancy program was not directly at issue in NFIB, but this language strongly suggests that the plurality viewed it as a permissible alteration of the old program. -23- It noted that the manner in which the expansion [was] structured indicate[d] that . . . Congress . . . recognized it was enlisting the States in a new health care program because Congress created a separate funding provision to cover the costs of providing services to any person made newly eligible by the expansion and because Congress mandated that newly eligible persons receive a level of coverage that is less comprehensive than the traditional Medicaid benefit package. Id. at 2606. In short, the MOE provision as applied here does not create a new program and falls comfortably within Congress's express reservation of power to alter or amend the terms of the Medicaid statute in its coverage of previously covered groups. See Cong. Research Serv., Selected Issues Related to the Effect of NFIB v. Sebelius on the Medicaid Expansion Requirements in Section 2001 of the Affordable Care Act 5-6 (July 16, 2012), available at http://www.ncsl.org/documents/health/aca_medicaid_expansion_memo_ 1.pdf (concluding that the MOE provision of the ACA remains valid after NFIB because it is not part of the 'new Medicaid expansion program' for which the states must have a 'genuine choice'). Further, the states had notice at the inception of the Medicaid program that continued participation by a state in Medicaid might be conditioned on a requirement such as the MOE provision here. As a result, there is no Spending Clause violation under NFIB. See also California v. United States, 104 F.3d 1086, 1092 -24- (9th Cir. 1997) (rejecting California's argument that Congress cannot introduce new conditions on participation in Medicaid because California now has no choice but to remain in the program in order to prevent a collapse of its medical system); Stowell v. Ives, 976 F.2d 65, 69 (1st Cir. 1992) (finding that statute providing that U.S. DHHS would not approve a state plan for medical assistance if the state reduced payment levels for the AFDC program provided incentives -- not commands -- to the States, since states could choose to maintain AFDC benefits or to reduce them and risk losing federal funding). Rather, this is one of the typical case[s] in which we look to the States to defend their prerogatives by adopting 'the simple expedient of not yielding' to federal blandishments when they do not want to embrace the federal policies as their own. NFIB, 132 S. Ct. at 2603 (quoting Massachusetts v. Mellon, 262 U.S. 447, 482 (1923)). Maine DHHS's arguments to the contrary are unconvincing. First, Maine DHHS argues that the MOE provisions are an integral part of the Medicaid expansion that was considered in NFIB, and so they must be struck down as a direct implementation of the ruling in NFIB. Not so. The plurality focused exclusively on the amendments to Medicaid that required states to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level. NFIB, 132 S. Ct. at 2606. The Court did not hold, or even intimate, that other changes to -25- Medicaid wrought by the ACA, such as the MOE provision at issue here, were constitutionally infirm. To the contrary, the plurality expressly stated that it was holding unconstitutional only the sanction of withholding all Medicaid funding from states that refused to accept this basic change in the nature of Medicaid. Id. at 2608. That remedy d[id] not require striking down other portions of the Affordable Care Act. Id. Second, Maine DHHS contends that, regardless of its earlier choice to provide coverage for low-income 19- and 20-yearolds, Congress had not previously mandated this coverage, so the now-mandated MOE coverage is new. It argues that Congress cannot threaten to withdraw all Medicaid funds from a State for failing or refusing to cover categories of adults for whom Medicaid has never previously mandated coverage, regardless of the fact the state had chosen to provide such coverage. In fact, Congress can do so and it has done so, on numerous occasions. Moreover, the NFIB plurality expressly said Congress is allowed to do so, so long as the change effected by the expansion is a shift in degree rather than a shift in kind. See id. at 2605. NFIB approved of a past amendment that newly required states to cover pregnant women; that was a shift in degree and not in kind, as is this. Id. at 2605–06. Further, application here of § 1396a(gg) concerns children, a classic Medicaid program objective, not adults. -26- Third, Maine DHHS argues that § 1396a(gg) is coercive because when a federal program is as large as Medicaid is . . ., the State has no option but to participate. That is not the test NFIB has adopted. Even were the question of tests open, Maine DHHS's Spending Clause claim based upon coercion alone does not work. As the Supreme Court noted long ago, an attempt to determine when inducement to comply with a condition on the use of federal funds crosses the line into compulsion would plunge the law into endless difficulties. Davis, 301 U.S. at 590 (Cardozo, J.); see also Oklahoma v. Schweiker, 655 F.2d 401, 413-14 (D.C. Cir. 1981) (The courts are not suited to evaluating whether the states are faced . . . with an offer they cannot refuse or merely a hard choice.). Maine DHHS's argument that the MOE provision is indistinguishable from the Medicaid expansion considered in NFIB is, as explained, unpersuasive. As it affects Maine, the MOE provision requires Maine to do no more than continue to cover low-income individuals aged 18 to 20 for a period of nine years, and in exchange Maine will receive the classic funding. By contrast, the new Medicaid program expansion would have required Maine to cover all low-income individuals indefinitely. NFIB, 132 -27- S. Ct. at 2606. Those changes are not the same nor even analogous.10 C. Claimed Pennhurst Anti-Retroactivity Violation Maine DHHS also argues that the application to it of the MOE provision violates the Pennhurst anti-retroactivity principle because Congress changed the deal it offered to Maine in 2009. Maine DHHS points out that, in 2009, Maine was required to maintain eligibility standards only through 2010 in order to get the stimulus funds it had chosen to seek. Then, in 2010, with the passage of the ACA, Maine was required to maintain those standards through 2019 in order to avoid losing all Medicaid funds. This retroactivity argument fails. In Pennhurst, the Supreme Court explained that legislation enacted pursuant to the spending power is much in the nature of a contract: in return for federal funds, the States agree to comply with federally imposed conditions. 451 U.S. at 17. But a state cannot voluntarily and knowingly accept[] the terms of the 'contract' if it is unaware of the conditions or is unable to ascertain what is expected of it. Id. Thus, if Congress intends to impose a condition on the 10 In briefing and at oral argument, counsel for Maine DHHS argued that, because the NFIB Court did not sever the application of the Medicaid expansion only to those 21 and above, the decision means that Congress may not make coverage of 19- and 20-year-olds mandatory. We see no basis to so conclude. The question of whether to sever application of the expansion to 18- to 20-yearolds from application of the expansion to 21- to 64-year-olds was not before the Court in NFIB. -28- grant of federal moneys, it must do so unambiguously; it may not surpris[e] participating States with post acceptance or 'retroactive' conditions. Id. at 17, 25. The ACA did not surprise Maine with a retroactive condition. Because Congress has reserved in the Medicaid Act the power to alter or amend the Medicaid program, states have had fair notice that Congress may make incremental changes such as increasing the number of eligible children. NFIB, 132 S. Ct. at 2606.11 Here, Congress did not even go that far; instead, it merely required that states continue providing coverage to children on the same terms as were in effect on the date of the ACA's passage. Maine DHHS appears to argue that it could not have foreseen that in exchange for stimulus funds it would be locked into those coverage levels at a later time. But this modest change falls within the Medicaid Act's broad reservation clause. Maine was on notice, both before and after accepting stimulus funds, that an incremental alteration of Medicaid might change the conditions on participation in the Medicaid program in the way that § 1396a(gg) has. Put differently, Maine was not unaware of the conditions [on its participation in Medicaid] or . . . unable to ascertain what [was] expected of it, Pennhurst, 451 U.S. at 17, when it chose to 11 As explained in greater detail above, at the inception of the Medicaid program, states were required to cover individuals aged 18 to 20 if they would have qualified for the AFDC program but for their age, and Congress at one point expanded Medicaid to cover 18-year-olds regardless of their status as dependents. -29- receive funds under Medicaid or under the ARRA. There is no constitutional infirmity here.