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TMFHelical (98.69)

Healthcare Hearings III - Coercion

Recs

7

March 29, 2012 – Comments (3)

The final day of arguments before the court focused first on whether the Medicaid expansion proposed in PPACA is coercive to the states.  I've listened to more than a few health care related discussions before the Supreme Court, but this is the first that I recall being 'capital F' Foolish.  I'd encourage all to read/listen to both the Tuesday discussion linked yesterday and Wednesday's.  The Wednesday arguments both 'educated and enriched' but they were also …. Funny (amused).  Justice Scalia was particularly jocular.  The transcript notes 15 instances of 'laughter' (I'm really impressed by the transcript service here by the way).  This was an afternoon session, and it truly sounded and read as though it occurred after the proverbial Washington DC 'three martini' lunch (just saying).  For example

Page 21

JUSTICE SCALIA: Mr. Clement, I didn't take the time to figure this out, but maybe you did. Is there any chance that all 26 States opposing it have Republican governors, and all of the States supporting it have Democratic governors? Is that possible?

MR. CLEMENT: There's a correlation, Justice Scalia.

JUSTICE SCALIA: Yes.

Page26

MR. CLEMENT: The answer is no, and that's because we're here saying there are three things that make this statute unique.

JUSTICE SCALIA: What are your second and third? I'm on pins and needles to hear your second--

Page 31

JUSTICE SCALIA: Mr. Clement, the Chief has said I can ask this.

CHIEF JUSTICE ROBERTS: He doesn't always check first. (laughter)

JUSTICE SCALIA: As I recall your -- your theory, it is that to determine whether something is coercive, you look to only one side, how much you're threatened with losing or offered to receive. And the other side doesn't matter.

I don't think that's realistic. I mean, I think, you know, the -- the old Jack Benny thing, Your Money or Your Life, and, you know, he says "I'm thinking, I'm thinking." It's -- it's funny, because it's no choice. You know? Your life? Again, it's just money. It's an easy choice. No coercion, right? I mean -- right?

Now, whereas, if -- if the choice were your life or your wife's, that's a lot harder.  Now, is it -- is it coercive in both situations?

MR. CLEMENT: Well, yes. It is.

JUSTICE KENNEDY: I thought you were going to say that it's your money and your life.

JUSTICE SOTOMAYOR: Mr. Clement, he's not going home tonight.

 

Anyway, back on point.  At question initially was whether or not the PPACA coerces states to participate in the Medicaid expansion by threatening to withdraw all Medicaid funds if it does not.  Medicaid participation is voluntary, but all states participate, and it is argued that the sheer size of the program makes it all but impossible for them not to participate, and as this size has increased with past expansions it is reaching/has reached the level of coercion----

 

 

Page 24

MR. CLEMENT: The one major difference is the size of the program. I mean, the expansion of Medicaid since 1984 is really breathtaking. Medicaid, circa 1984, the Federal spending to the States was a shade over $21 billion. Right now, it's $250 billion, and that's before the expansion under this statute.

JUSTICE KAGAN: Well, if you are right, Mr. Clement, doesn't that mean that Medicaid is unconstitutional now?

 

The bill does not overtly state that not excepting the expansion will result in all funds being withdrawn, but leave that to the discretion of the Secretary of HHS.  Such discretion is historically bound by 'reasonableness' considerations, but it was noted this discretion has been used as a hammer in the past.

 

Page 16

MR. CLEMENT: And if I could just add one thing just to the discussion is the point that, you know, this is not all hypothetical. I mean, in -- there was a record in the district court, […] it's a letter in the record in this litigation, and it's a letter from the secretary [of HHS] to Arizona, when Arizona floated the idea that it would like to withdraw from the CHIP program, which is a relatively small part of the whole program.

Later on counter arguments Justice Roberts referred back to this.

 

Page 48

CHIEF JUSTICE ROBERTS: Could you give me some assurance? We heard the question about whether or not the Secretary would use this authority to the extent available. Is there circumstances where you are willing to say that that would not be permissible? I'm thinking of the Arizona letter, for example. I mean, if I had the authority and I was in that position, I would use it all the time. You might -- you want some little change made? Well, guess what; I can take away all your money if you don't make it. I win. Every time.

On page 43 Justice Alito makes the education analogy I was looking for, but as a hypothetical.  This didn't get fully explored in my opinion, largely due to it being hypothetical and not on-point to the question before the court.  Still, nice to see the analogy made.  Back on the point of coercion.

Page 54

GENERAL VERRILLI: I think the situation is generally as you've described it [Justice Buyer noting such discretion has not been used unreasonably in the past], but I do want to be careful in saying I don't think it would be responsible of me to commit now that the Secretary would exercise the discretion uniformly in one way or another.

CHIEF JUSTICE ROBERTS: Well, but that's just saying that when, you know, the analogy that has been used, the gun to your head, "your money or your life," you say, well, there's no evidence that anyone has ever been shot.

Page 67

JUSTICE SCALIA: … Is it conceivable to you, as it was evidently not to Congress, that any State would turn down this offer, that they can't refuse? Is it conceivable to you that any State would have said no to this program? Congress didn't think that, because some of its other provisions are based on the assumption that every single State will be in this thing. … Now, do you -- can you conceive of a State saying no? And -- and if you can't, that sounds like coercion to me.

GENERAL VERRILLI: I think -- I think Congress predicted that States would stay in this program, but the -- prediction is not coercion. And the reason Congress predicted it, I think, Justice Scalia, is because the Federal government is paying 90-plus percent of the costs. It increases State costs.

 

Hate to do this aside, but through much of this I've felt there is a willingness to 'describe' the elephant in the room, but not call it an elephant.  States are concerned about the long term sustainability of Medicare/Medicaid and worried that the sheer size of the program and current level of funding 'adjust', that they are coercively trapped into the non-choice of the impossibility of getting out of it.

This is discussed a bit near the end. 

 Page 73+

GENERAL VERRILLI:  And then all of the projections that we have seen suggest that the medium- to long-term costs once these changes are in place are going to be dramatically lower for the states --

CHIEF JUSTICE ROBERTS: Obviously, the Federal government isn't bound to that. And what if, after the 90 percent, they say well, now -- from now on, we're going to pay 70 percent? What happens then? Where does that extra money come from?

GENERAL VERRILLI: Well, I think -- then -then the States would have a choice at that -- at that point whether they were going to stay in the program or not. But that isn't what we have here, and --  Well, I'm not saying it would be an easy choice, Mr. Chief Justice.…

CHIEF JUSTICE ROBERTS: Well, the Secretary has the discretion. We're talking about something else. We're talking about fiscal realities, and whether or not the Federal government is going to say we need to lower our contribution to Medicaid and leave it up to the States because we want the people to be mad at the States when they have to have all these budget cuts to keep it up, and not at the Federal government.…..

GENERAL VERRILLI: Well, like I said, I -- I agree that it would be a difficult choice in some circumstances. But that is not to say it's coercion as a legal matter or even as a practical matter. And I think it would depend on what the circumstances were on how -- and I -- I think, trying to think about how a court would ever answer the question of whether it was coercive, it was too difficult as a practical matter for States ..

 

Analogy to the Dole case is made throughout, where states were require raise the drinking age to 21 or risk 7% of federal highway funds.  This was deemed non-coercive, but the argument is that the scale is so different that coercion should be considered in this instance.

And in closing (abbreviated).

GENERAL VERRILLI: In a very fundamental way, this Medicaid expansion, as well as the provisions we discussed yesterday, secure of the blessings of liberty. And I think that that is important as the Court is considering these issues that that be kept in mind. The -- the Congress struggled with the issue of how to deal with this profound problem of 40 million people without health care for many years, and it made a judgment, and its judgment is one that is, I think, in conformity with lots of experts thought, was the best complex of options to handle this problem.

… And I would suggest to the Court, with profound respect for the Court's obligation to ensure that the Federal Government remains a government of enumerated powers, that this is not a case in any of its aspects that calls that into question. That this was a judgment of policy, that democratically accountable branches of this government made by their best lights.

And on the other side (also abbreviated)

MR. CLEMENT:      Justice Alito, your hypothetical, I think, aptly captures the effect on this, based on the fact that these tax dollars are being taken from the State's tax base … if you don't take the option we are giving you, we are going to have a Federal substitute that will go in, and we will take care of the unemployed in your States.

Here, if you don't take this offer we are giving you, your tax dollars will fund the other 49 States, and you will get nothing.  But of course, this situation is much more coercive, even in your hypothetical, because it is tied directly to the mandate. It's also tied to the -- to participation in the preexisting program. …It's really hard to understand tying the preexisting participation in the program as anything other than coercive.

Let me just finish by saying I certainly appreciate what the Solicitor General says, that when you support a policy, you think that the policy spreads the blessings of liberty. But I would respectfully suggest that it's a very funny conception of liberty that forces somebody to purchase an insurance policy whether they want it or not. And it's a very strange conception of federalism that says that we can simply give the States an offer that they can't refuse, and through the spending power which is premised on the notion that Congress can do more because it's voluntary, we can force the States to do whatever we tell them to. That is a direct threat to our federalism.

 

A lot here.  My impression is that the court will not find the bill 'coercive', but sent a signal that should the Secretary of HHS ever use the power implied in the bill in the feared coercive manner, they would hear a 'reasonableness' challenge to that in short order.  The scale arguments are also concerning, but probably a consideration for another day.

Again, thanks for reading.

 

TMFHelical

Home Coverage Fool

3 Comments – Post Your Own

#1) On March 29, 2012 at 12:00 PM, TMFHelical (98.69) wrote:

Not sure why that one part bolded.  This was a bit of a formatting headache redarding italics, font changes, spacing etc., so sorry about the inconsistency.

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#2) On March 29, 2012 at 3:02 PM, CluckChicken (27.38) wrote:

This series has been a very good read, hope I can find the time to actually read/listen to everything at some point.

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#3) On March 29, 2012 at 8:13 PM, TMFHelical (98.69) wrote:

Thank you Chuck

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