Michael Barone explores for the Washington Examiner‘s “Beltway Confidential” whether the 2010 federal health care law is constitutional. (North Carolina’s Republican legislative leaders argue the answer is no.)
But even if the Eleventh Circuit reverses Judge Vinson’s decision, there is another challenge to the law that is worth noting. Vanderbilt Law Professor James Blumstein has submitted a brief as amicus curiae arguing that Obamacare’s substantial changes to Medicaid are unconstitutional. The law requires that states expand Medicaid to cover by 2014 all persons with income below 133% of poverty; the only alternative is for states to opt out of Medicaid entirely and relinquish the federal dollars that come with it.
In 1981 the Supreme Court in Pennhurst State School and Hospital v. Haldermann ruled that while the federal government could require states to fulfill specific conditions in order to receive federal dollars under aid programs like Medicaid, the federal government could not sharply change those requirements. These programs are in the nature of a contract, the Court said, and terms which the federal government could demand at the formation of such a contract could not be added as a requirement by modification of the contract. In a contract case, for example, sailors could demand a certain wage before leaving port to which the shipowner could agree. But it’s unfair for the sailors to modify that by demanding much more money when the ship has reached the fishing grounds. Similarly, Blumstein argues, Obamacare’s substantial changes in Medicaid, made after states have become dependent on federal dollars to maintain their existing programs, constitutes an unfair modification of a preexisting contract. The states have acted in reliance on the previous contract and done things they would not otherwise have done, leaving them vulnerable to grave damage if the rules are changed in the middle of the game.
