Opinion ID: 2752180
Heading Depth: 3
Heading Rank: 1

Heading: The plurality's approach

Text: The plurality began its analysis by noting that the Medicaid expansion of the ACA dramatically increase[d] state obligations under Medicaid. Id. at 2601. Under the pre-ACA system, states were required to cover only certain discrete categories of needy individuals -- pregnant women, children, needy families, the blind, the elderly, and the disabled. Id. (citing 42 U.S.C. § 1396a(a)(10)). The Medicaid program expansion, in contrast, require[d] States to expand their Medicaid programs . . . to cover all individuals under the age of 65 with incomes below 133 percent of the federal poverty line. Id. (citing 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII)).6 6 The Medicaid program expansion was projected to increase federal Medicaid spending by $434 billion in its first six years. Reply Br. of State Pet'rs on Medicaid at 19, Florida v. U.S. Dep't of Health & Human Servs., 132 S. Ct. 2763 (2012) (No. 11-400), 2012 WL 864598 at . -13- The plurality reiterated the longstanding rule that Congress may use its power under the Spending Clause to condition federal grants to states upon the States' 'taking certain actions that Congress could not require them to take.' Id. (quoting Coll. Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 686 (1999)). But, in order for an exercise of the spending power to be deemed legitimate, the state must voluntarily and knowingly accept the terms of the deal. Id. at 2602 (quoting Pennhurst, 451 U.S. at 17). Put differently, Congress may use its spending power to create incentives for States to act in accordance with federal policies, but it oversteps its authority when 'pressure turns into compulsion.' Id. (quoting Charles C. Steward Mach. Co. v. Davis, 301 U.S. 548, 590 (1937)). This limit on Congress's spending power is necessary to ensur[e] that Spending Clause legislation does not undermine the status of the States as independent sovereigns in our federal system. Id. The plurality opinion reasoned that, while Congress is entitled to condition the receipt of funds on the States' complying with restrictions on the use of those funds in order to ensure[] that the funds are spent according to [Congress's] view of the 'general Welfare,' when Congress places conditions on funds that do not govern the use of those funds, the conditions are properly viewed as a means of pressuring the States to accept policy changes. Id. at 2603–04. The plurality determined that -14- the latter situation obtained with respect to the Medicaid program expansion. That expansion, Chief Justice Roberts explained, accomplishe[d] a shift in kind, not merely degree. The original program was designed to cover medical services for four particular categories of the needy: the disabled, the blind, the elderly, and needy families with dependent children. . . . Previous amendments to Medicaid eligibility merely altered and expanded the boundaries of these categories. Under the [ACA], Medicaid . . . is no longer a program to care for the neediest among us, but rather an element of a comprehensive national plan to provide universal health insurance coverage. Id. at 2605–06. The plurality viewed the Medicaid expansion as creating an entirely new health care program, participation in which was a condition of states receiving even continued funding for an old program (pre-ACA Medicaid). See id. at 2606. This meant that the Medicaid expansion was a condition upon the receipt of funds that did not govern the use of those funds. The plurality next considered whether 'the financial inducement offered by Congress' [as to the new program expansion] was 'so coercive as to pass the point at which pressure turns into compulsion.' Id. at 2604 (quoting South Dakota v. Dole, 483 U.S. 203, 211 (1987)) (internal quotation marks omitted). The precedent for this portion of the analysis was the Court's decision in Dole. Dole had considered whether Congress's threat to withhold five percent of a state's federal highway funds if the state did not raise its minimum drinking age to 21 was permissible under the -15- Spending Clause. Dole, 483 U.S. at 211. Dole held that it was permissible. Id. at 211–12. The NFIB plurality distinguished Dole, saying while the condition was not a restriction on how the highway funds . . . were to be used, it was not impermissibly coercive, because Congress was offering only 'relatively mild encouragement to the States.' NFIB, 132 S. Ct. at 2604 (quoting Dole, 483 U.S. at 211). By contrast, the plurality found that the financial inducement and penalty in the new Medicaid program expansion was much more than 'relatively mild encouragement' -- it [was] a gun to the head. Id. Importantly, the plurality expressly acknowledged that Congress is permitted to modify the Medicaid program, and to condition states' continuing participation in Medicaid upon compliance with those modifications, as it has done on numerous occasions in the past. Id. at 2605.7 The plurality found that the new Medicaid program expansion was much more than a simple modification -- it was a dramatic[] transform[ation] of the program. NFIB, 132 S. Ct. at 2605–06. States could not have anticipated that their 7 That was in accord with settled law, see California v. United States, 104 F.3d 1086, 1092 (9th Cir. 1997); Stowell v. Ives, 976 F.2d 65, 69 (1st Cir. 1992); Oklahoma v. Schweiker, 655 F.2d 401, 413–14 (D.C. Cir. 1981), and the NFIB Court did nothing to unsettle that law. See also 42 C.F.R. § 430.12(c)(1) (state plan must provide that it will be amended whenever necessary to reflect . . . [c]hanges in Federal law, regulations, policy interpretations, or court decisions). -16- entitlement to Medicaid funds would become conditioned on providing new medical care to all individuals with incomes below 133 percent of the poverty line. Id. Thus, the new Medicaid program expansion violated the anti-retroactivity rule of Pennhurst, which provides that Congress may not surpris[e] states participating in a federal-state cooperative program with post-acceptance or 'retroactive' conditions. Id. (quoting Pennhurst, 451 U.S. at 25).