[Congressional Record Volume 157, Number 193 (Thursday, December 15, 2011)]
[Senate]
[Pages S8670-S8671]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
HEALTH CARE REFORM
Mr. GRASSLEY. Mr. President, in the past 3 weeks I think I have come
to the floor three times to discuss the case on the President's health
care reform bill: one time to discuss the constitutionality of the
individual mandate and another time to deal with the severability
clause. I come now to speak about the unconstitutionality of the
massive expansion of Medicaid. Those are three of four issues that the
Court is going to deal with. My colleagues probably remember the Court
has extended the period of time they normally deal with arguments
before them from 1 hour to 5\1/2\ hours because this is such a very
important case.
Today I wish to talk about the far-reaching implications of this
mandate, but also about the constitutionality of the Medicaid
expansion. If the Supreme Court rules the individual mandate
unconstitutional, it will have the effect of striking down this new law
that has not been fully implemented. If the Supreme Court rules that
the Medicaid expansion and the Affordable Care Act is unconstitutional,
it has the potential to cause significant changes in a program that has
been in operation for the last 46 years.
Just to remind everybody about Medicaid, it was created in 1965 at
exactly the same time Medicare was created. Where Medicare was created
to provide health care coverage for our senior citizens, Medicaid was
created as a safety net for low-income individuals. Medicare is run
exclusively by the Federal Government. Medicaid is a Federal-State
partnership. The Federal Government sets the parameters of the Medicaid
Program. It pays at least half of the program in every State but then
turns the functional operation of the Medicaid Program over to the
States.
In the 46 years since both programs were created, eligibility for the
Medicare Program has been essentially unchanged. On the other hand,
eligibility for the Medicaid Program has expanded significantly through
the years and, with that, the program has grown dramatically as well.
Medicaid, when it was created, covered fewer than 5 million. Today,
the Medicaid Program currently covers nearly 57 million. The program
spends more than $300 billion each year.
Medicaid has expanded so dramatically for two reasons. First, at
various points in the last 46 years Congress has mandated that the
States increase eligibility and services for the program. Second,
Congress has also given the States the option to expand their
eligibility. When Congress gives States the option of expanding their
eligibility, States can expand and the Federal Government will still
provide its proportionate share of Federal dollars.
For instance, one of the programs I helped get passed with Senator
Kennedy from Massachusetts when he was a Member of the Senate was a
program that allowed some help for families who had particularly high
health care costs for kids--something that was just catastrophically
high. That is just one example.
The decision to expand is up to the States. When Congress mandates
the States expand eligibility, States can either expand their programs
or forfeit all Federal funds for the program.
Now, this is what we call an all-or-nothing requirement. It has been
used in every expansion of the program. The all-or-nothing requirement
on States has not only been used to expand eligibility within the
Medicaid Program, but it has been used to expand services and require
changes in the administration of the program.
If the Federal Government wants States to cover podiatrists in
Medicaid, the Federal Government can mandate States to do so. If a
State doesn't do it? Withhold all Federal dollars to that State. If the
Federal Government wants States to implement a secondary payer program
to ensure that services are being properly paid by private dollars, the
Federal Government can mandate States to do so and withhold every
Federal dollar if that State refuses to go along.
It has been a staple of the program for 46 years that the Federal
Government can require States to do certain things in Medicaid. Now
comes along the Affordable Care Act. That act requires States to expand
their Medicaid Program to cover all individuals up to 133 percent of
the poverty level. It is the first expansion of Medicaid's mandatory
eligibility groups since the all-or-nothing expansion in the bills of
1989 and 1990. Those were both reconciliation acts.
It is this all-or-nothing requirement that States are challenging and
that the Supreme Court will consider next year and has given a certain
portion of the 5\1/2\ hours just to debate this issue. So I think that
means the Supreme Court thinks this is a very significant issue they
are being asked to consider.
So I would like to describe the arguments being made by the States
that this is an unconstitutional use of congressional power. The States
argue that the 10th amendment limits the power of Congress to coerce
States to accept Federal funds as opposed to providing inducements. The
States argue that a restriction on Federal funds compels rather than
induces if its burdens and losses as they affect vital ordinary State
functions are too burdensome and costly. So I quote from their
position:
By conditioning all of the States Federal Medicaid
funding--for most States, more than a billion dollars each
year--upon agreement to substantially expand their Medicaid
programs, the Affordable Care Act passes the point at which
pressure turns into compulsion and achieves forbidden direct
regulation of the States.
The part of the quote which says it is at the point where pressure
turns into compulsion makes the act unconstitutional because it has
always been a principle that the Federal Government can put certain
conditions on States, but if it reaches a point where the State has to
do it, in this case the States say: You have really gone too far.
The Affordable Care Act withholds all Federal dollars, then, from
States that refuse to submit to the policy dictates of the Congress.
Medicaid accounts for more than 40 percent of all Federal funds that
States receive. States spend on average 20 percent of their State
budget on Medicaid. Federal funds cover, on average, 57 cents of each
dollar spent on the program because previously I said the Federal
Government gives every State at least 50 percent, but the average of
all 50 States is 57 percent of the Medicaid dollars coming from Federal
dollars.
In my State of Iowa, for instance, I think it is 63 percent from the
Federal Government and 37 percent of State funds. So the loss of all
Federal Medicaid funding would obviously be devastating to the States.
The States maintain that the law's expansion of Medicaid was
deliberately designed to force the States to agree to expand the
program because of the threat that a State's entire Federal funding
stream would be cut off if they decided not to go along with decisions
made in Congress. In the harshest terms, they were made an offer they
could not refuse. Further quoting from the States' argument:
The Affordable Care Act essentially holds the States
hostage based on their earlier decision to establish a
Medicaid infrastructure and accept federal funds subject to
different conditions.
The Affordable Care Act uses the States' decision to accept
earlier federal inducements against them, and, in doing so,
presents states with no real choice: they must abandon
completely the existing Medicaid system and funding or accept
the radical new conditions. This amounts to a massive bait-
and-switch.
The States are arguing to the Supreme Court that there is no way the
States can turn down a Federal inducement as massive as all Medicaid
funding.
This is especially true because the effect of declining is that the
State's own taxpayers have to pay the full cost of providing health
care for the neediest citizens of the State and, at the same time,
provide the Federal Government taxes for Medicaid funds that would be
distributed to pay for the program, including expansion in the other 49
States.
Since no State could make taxpayers fund the State and Federal
portions of Medicaid, while also taxing their citizens to pay for
Medicaid in the other 49 States, it is a phony choice, not a real
choice, for the States to turn down the money to expand their Medicaid
Programs. In other words, the States are being compelled to do so.
The States argue that giving notice of the coercion they face does
not make the choice any less coercive, and they argue that when States
originally accepted Medicaid, they were not
[[Page S8671]]
warned that their participation would put them at the mercy of any
future unpredictable congressional demands.
The States are arguing Congress can change Medicaid, and Congress can
condition the funding for those changes on State agreement to them.
But it cannot force changes on the States by threatening them with
the loss of the entirety of Federal funds.
Although the Federal Government will pay the vast majority of the
cost of expansion, the States also point out that coercion turns on the
financial inducement that Congress offers, not the amount a State is
coerced to spend.
The critical issue is what is referred to as the ``coercion
doctrine.'' The coercion doctrine protects the States' decision whether
the inducement is worth the cost.
Among the controlling cases is South Dakota v. Dole in 1987. The
Supreme Court there upheld a Federal law that threatened States with
the loss of 5 percent of Federal highway funds if they did not raise
their drinking age to 21.
Remember, that was only 5 percent of their road funds, not 100
percent of their road funds, as in the case of the all-or-nothing in
the case of Medicaid, where if you do not go along, you are going to
lose everything.
So in that Dole case, writing for the majority, Chief Justice
Rehnquist noted:
Our decisions have recognized that, in some circumstances,
the financial inducement offered by Congress might be so
coercive as to pass the point at which ``pressure turns into
compulsion.''
In the years since the Dole decision, Federal courts have yet to
establish a clear test for coercion. I assume that is what could happen
if they would overturn Congress's decision; that there would be a
clearer test of coercion in this Affordable Care Act.
The Supreme Court will be challenged in this affordable care act case
to determine where the limits of Federal coercion, if any, lie.
It is difficult to overstate the potential implications of this
particular aspect of the affordable care act in the case that is being
appealed.
There are three specific ways this decision could have a profound
impact on Federal policy if the Supreme Court rules in favor of the
States.
A ruling for the States could affect future Medicaid policy, current
Medicaid policy, and broader Federal-State partnerships.
The expansion of Medicaid in the Affordable Care Act was written to
minimize the cost to the States. The Federal Government pays for 100
percent of the cost of the Medicaid expansion in the first few years,
before transitioning to an approximately 92-percent share of the cost
of the expansion.
If the Federal Government cannot require expansion of the Medicaid
Program and pick up 92 percent of the tab, what can the Federal
Government require? Would a mandatory expansion be constitutional if
the Federal Government permanently paid for 100 percent of the cost?
Could the Federal Government mandate future expansions if they were
much smaller in scope, such as in the 1989 and 1990 mandatory
expansions under those reconciliation bills?
If the Federal Government wanted to require States to cover
podiatrists or implement a secondary payer program, could it do so
using Federal funds as leverage to require it?
A ruling in favor of the States would raise those questions.
Further, if the current mandatory expansion of Medicaid is
unconstitutional, what does that imply for previous expansions and
policies?
In the 1989 and 1990 acts, when Congress required States to expand
eligibility for women and children, Congress did so without providing
any additional funding to the States beyond their normal share, which
in the case of Iowa today would be 63 percent Federal, 37 percent
State.
If the Supreme Court rules in favor of the States, will previous
mandatory expansions to Medicaid be subject to challenge? Will a State
be able to challenge the existing enforcement mechanism of withholding
Federal dollars if a State wants to ignore a service requirement or an
antifraud provision? These questions will then have to be answered.
Finally, a Supreme Court ruling on a coercion test necessarily has
broader implications for all Federal-State partnerships. The original
Dole case was about transportation funding.
A Supreme Court ruling in favor of the States will necessarily bring
into question every agreement between the Federal Government and the
States where the Federal Government conditions 100 percent of the
Federal funds on States meeting requirements that are determined in
Washington, DC.
It is certainly possible that such a Supreme Court ruling could
require future Congresses to carefully consider a coercion test in
designing legislation.
A Supreme Court ruling in favor of the States in this case could not
only jeopardize the mandated Medicaid expansion in the Affordable Care
Act but could challenge the fundamental structure of Medicaid and have
broader implications outside health care.
One may ask: Does the Supreme Court have this case before it--and why
does it have it before it?--a case with such broad and far-reaching
implications? It is because of a massive restructuring of our health
care system in a partisan fashion, using nearly every procedural tool
at the majority party's disposal in accomplishing the goal of passage.
The constitutionality of this law has been challenged in numerous
courts throughout the country. These challenges will soon be heard
before the Supreme Court. While most people want to focus on the
individual mandate, it is important we do not forget the potential
consequence of the Medicaid question before the Court.
It could, obviously, strike the expansion in the Affordable Care Act.
It could hamstring future Congresses as they consider potential
policies for the Medicaid Program in the future. It could threaten the
fundamental structure of the Medicaid Program by bringing into question
all the requirements on the States in the program today. It could
require future Congresses to consider the structure of every Federal-
State partnership.
We are here discussing this because the White House and the
Democratic majority put their partisan goals ahead of collaboration
with Republicans and States to build legitimate public policy--contrary
to how most social policy in this country has been devised: Social
Security, bipartisan; Medicare, Medicaid, bipartisan; civil rights
laws, bipartisan--but not this Affordable Care Act, a partisan
document.
Now we see that far more than this one specific policy is threatened.
If the Supreme Court accepts the States' argument, a host of
constitutional questions will surround the operation of many Federal
funding streams to the States. It would be difficult to overstate the
significance of such a ruling. I have outlined it was not necessary for
the Congress to have taken action that might produce that result.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. RUBIO. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Bennet.) Without objection, it is so
ordered.
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