Obama Coercion of States Continues


Yoggi Berra said, “It’s like déjà vu, all over again.” Perhaps he was talking about President Obama and his signature healthcare legislation, ObamaCare.

When the Affordable Care Act was passed by Congress in 2010, the statute called for the expansion of Medicaid in all states. Although the federal government would pick up 100 percent of the additional cost to the states for three years, the money would decline to 90 percent of the cost thereafter. To make sure the states complied, they would be threatened with loss of all federal Medicaid funding if they refused the expansion.

The Supreme Court called this coercion. In NFIB v. Sebelius (2012), the high court struck down this provision of ObamaCare. Chief Justice John Roberts called this “a gun to the head” of the states and a blatant violation of the constitutional principle of federalism. President Obama, a constitutional lawyer, surely knew this, but he approved the legislation nevertheless.

Now he’s back again with the same issue in another attempt to coerce the states into expanding Medicaid. Florida Governor Rick Scott is suing the Obama administration for threatening to withhold more than $1 Billion in Medicaid funds due the state under a waiver program first approved in 2005. In Texas, the Obama administration is threatening to cancel a five-year, $29 Billion Medicaid waiver approved in 2011. Both states failed to expand Medicaid under ObamaCare.

John Daniel Davidson, director of the Center for Healthcare Policy at the Texas Public Policy Foundation, explains the situation in a Wall Street Journal article:

“Florida and Texas have waivers to get federal funding for otherwise uncompensated care payments to hospitals that treat Medicaid patients and the uninsured. But on April 14, federal officials sent a letter to Florida stating the Medicaid expansion “would reduce uncompensated care in the state,” and that the waiver and expansion “are linked.” No one in state government missed the clear implication. Not agreeing to the ObamaCare Medicaid expansion might endanger the waiver renewal. Federal officials have reached out to state officials in Texas and seven other states with the same message.”

It seems this president is determined to push the limits of his authority as far as the Supreme Court will let him – and even further if unchallenged. Once again he is putting “a gun to the head” of the states to force their compliance with his healthcare goals. Since Medicaid represents one of the largest budgetary items in every state’s budget, what other choice do they have but to comply unless there is judicial relief?

In Florida, this issue has prevented the state from passing a new budget until it is resolved. At the present time there is a $4.5 Billion dollar shortfall that must be reconciled. A special session of the legislature in June has been called by Governor Scott to pass a budget but it is unlikely the Obama administration will change their position short of a judicial review.

Davidson says the Obama administration is playing a dangerous game that could drag it back to the Supreme Court.

“The Obama administration’s gambit with the Medicaid waivers in Florida and Texas shows that states, red and blue, may be unprotected from coercion once they enter into cooperative federalism schemes. But it could provide an opportunity for the Supreme Court to conclude that “cooperative federalism” is not cooperative, but coercive, period.”

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