The Supreme Court Tackles Medicaid – Health Care Is Already a Constitutional Football

The mere possibility that health reform will reach the Supreme Court this year has generated widespread attention. But there is much more to health policy than “Obamacare”. Another major dispute is already on the justices’ agenda, and the case could prove just as important.

On the first day of the new term, the Court heard arguments in a case about Medicaid budget cuts. It may not sound like a glamorous issue, but the outcome could change the health care that all of us receive.

The case concerns an issue only a lawyer could love. Who can sue when a state cuts payments? Your first reaction may be, “who cares?”

Low-income beneficiaries whose health care is on the line certainly care. And so do many hospitals, doctors, clinics, labs, nursing homes, and other providers that treat those beneficiaries.

The State of California cut Medicaid payments by 10% to address its festering budget crisis. Several patients and providers sued to stop it. The Supreme Court has to decide whether they should be allowed into court.

Medicaid is a very complicated program. It is run by the states, but the federal government oversees what they do, and it provides half the funding. California made the cuts without getting federal approval.

When a state ignores a federal rule, who should be allowed to sue? The plaintiffs say they should because they have the most at stake. They point to a line of cases that permits private citizens to sue when state actions conflict with federal requirements. The federal government can be slow to act, and if individuals can’t go to court, who will hold the states accountable?

The State of California counters that permitting the case to proceed could open the floodgates for litigation. Anyone affected by Medicaid could tie up any proposed cuts in court, even with frivolous claims. How could states ever address their budget crises? California argues that only the federal government should be permitted to sue when its directives on Medicaid are at issue.

The Supreme Court’s decision could have far-reaching effects. Hundreds of billions of dollars are at stake every year. Medicaid is the fastest growing part of many state budgets, and many of them see cutbacks as the only path out of financial crisis.

Medicaid is also a lifeline for many health care providers, especially in inner cities. Major cuts could devastate them, and reduce the availability of care for everyone. They want their say if cutbacks go too far.

Medicaid is a major pillar of health reform. It will grow dramatically in 2014 to cover millions more people. Who will enforce this expanded right to benefits? Health reform could lose much of its effect if states decline to expand their Medicaid programs as required.

So, where are the ideological lines in this contest? The answer is all over the place.

The Obama administration is siding with California and its Democratic governor, Jerry Brown. It is joined by 30 states, including many with Republican governors. (Click here to see their brief).

Who supports the challengers? Democratic leaders in Congress, including Nancy Pelosi and Harry Reid. They are joined by the American Civil Liberties Union and the U.S. Chamber of Commerce. Strange bedfellows, indeed.

Based on the tone of questioning, the Supreme Court justices are falling into an unusual alignment, as well. (Click here for a transcript.) Liberal justices Ruth Bader Ginsburg, Sonya Sotomayor and Elena Kagan indicated support for private lawsuits at the oral argument along with conservative Anthony M. Kennedy, while liberal Stephen G. Breyer expressed skepticism along with conservative chief justice John G. Roberts.

With ideological lines blurred, the case doesn’t inspire partisan passions the way “Obamacare” does. It wasn’t reported on the front pages of many newspapers, including The Inquirer. (The story ran on page A8.)

But that doesn’t make the case any less important. The question of who can bring a Medicaid dispute to court may seem like a legal technicality, but it can have ripple effects throughout the entire health care system.

Health policy is much more complex than a simple battle between liberal and conservative viewpoints. Often, the most important issues go much deeper than that.

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