Medicaid Governance: Finding Federalism’s Middle Pathway, from Administrative Law to State Compacts

Abstract

This essay evolves from one side of the ACA Supreme Court case, Florida v. Department of Health and Human Services, namely the challenge mounted by several states concerning their obligation to expand Medicaid coverage by raising eligibility standards to 133 percent of the federal poverty, which is arguably the most significant element of ACA. The inquiry touches on details of the Medicaid 'coercion' claim to be considered by the Court as a backdrop to a broader discussion concerning federalism and the future of state regulation in health care - a matter shaped not only by law, but variables not easily controlled by Washington, in particular the economic realities faced by state government. It is difficult to write about a legal controversy amid a storm of litigation when speculation will soon become a footnote to reality, and concerns rightly will turn to confronting the black-and-white of the actual ruling. While no doubt, the decision in Florida and its unfolding details will inevitably reinforce the grand caveat that no one, lawyer and layperson alike, should second-guess the U.S. Supreme Court. It is not, however, the intent of this article to enter into legal speculation or voice an impression of the opinion a priori. Rather, this article builds on the case as a springboard for a different consideration of the federalism issue, one which proposes fundamental reforms to the current structures of health governance in the contexts of Medicaid and federal-state relations in this sector more broadly. This essay is composed of four parts. The first part explores health reform from a broad perspective, considering the array of goals and key elements in ACA, which, when pieced together, aspire for universal coverage. The second part discusses the status of Medicaid, a program that lies at the middle of the federalism debate, and whose future will determine the success or failure of ACA. The third part concentrates on the legal argument that the Medicaid expansion in ACA violates Congress’s constitutional tax-and-spend power, which is noteworthy not only for its legal basis but also its potential to usher in a broader exploration of the duality of health governance. The fourth part proposes how health reform can move forward, beyond the parameters of combative federalism and the confines of the present constitutional debate over Medicaid, positing considerations to better balance public health governance, and with luck goes beyond the mere proverbial shifting of deck chairs.