Is Medicaid constitutional?

10.1056/nejmp1204347 nejm.org e27(1) (ACA) before the Supreme Court, the most important issue before the Court may well be the constitutionality of the ACA’s Medicaid expansion. There are potential alternatives to the minimum-coverage requirement, but a finding that the Medicaid expansion is unconstitutional could threaten all federal spending programs that set minimum participation standards. Indeed, as Justice Stephen Breyer observed during the oral argument, if the plaintiff’s argument is accepted, then “Medicaid has been unconstitutional since 1964.”1 The ACA expands Medicaid to cover all adults under 65 years of age who have an income below 138% of the federal poverty level. The federal government will pay 100% of the cost of this expansion for 2014 through 2016, phasing down to 90% by 2020. But states must cover the newly eligible population in order to receive any federal Medicaid funding. The 26 Republican governors and attorneys general bringing the ACA lawsuit claim that the expansion is unconstitutional because they are being “coerced” into expanding their Medicaid programs under threat of losing all federal Medicaid funding. Their argument is grounded in statements made in two earlier Supreme Court cases speculating that financial inducements that the federal government offers states to participate in federal–state programs “might be so coercive as to pass the point at which ‘pressure turns into compulsion.’” No federal court has ever declared a law unconstitutional under this coercion theory, and it was rejected by the lower courts in this case. Paul Clement, arguing for the plaintiffs, contended that the Medicaid expansion is coercive because the states must choose between accepting expanded coverage and losing all federal Medicaid funds, that the lost funding would be enormous, and that if states don’t participate in Medicaid, their poorest population will be unable to comply with the ACA’s minimum coverage requirement. He also asserted that federal taxes for funding the expansion would leave states incapable of funding an alternative program if they chose not to participate. Solicitor General Donald Verrilli responded Is Medicaid Constitutional?