Millions of poor Americans remain uninsured thanks to a badly reasoned Supreme Court decision. The Affordable Care Act was designed to cover all poor Americans with either an expanded Medicaid or federally subsidized insurance. Insurance subsidies became available immediately when income lifted people out of eligibility for the expanded Medicaid. States not expanding eligibility would no longer participate in Medicaid and lose all federal Medicaid money.
In 2012, however, the Supreme Court sabotaged the ACA, holding it unconstitutional to make states choose between expanding or discontinuing Medicaid. States not expanding Medicaid therefore continued receiving federal money for the old program (National Federation of Independent Business v. Sebelius [567 U.S. 519]).
Millions of people in states which didn't expand Medicaid therefore remain uninsured today. Their incomes are too high for eligibility under the older Medicaid program, but not high enough to qualify for subsidized insurance, since the ACA only provides subsidies for people making too much to be covered by its expanded Medicaid.
The Court's decision, written by Chief Justice John Roberts, was conceptually incoherent. An earlier Court had upheld a five percent reduction in federal Highway Trust Fund disbursements to states refusing to raise their drinking age to 21. (South Dakota v. Dole.) Losing less than one percent of the total state budget was deemed "not impermissibly coercive." But federal Medicaid money amounted to about 20 percent of a typical state's budget. Roberts described this threatened cutoff as incompatible with state freedom under federalism; it was "economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion."
The Medicaid program, which unlike Medicare is administered by the states, is a voluntary association between the federal government and a participating state, created by their mutual consent. States are not required to participate and are free to withdraw. No sanctions are involved in any voluntary association, only inducements, so cutting off Medicaid money to a state that stops participating in Medicaid is a withdrawn inducement, not a sanction.
Roberts' analysis therefore suffered from fundamental conceptual confusion. Of the three types of social power — sanctions, inducements, and pure persuasion — only sanctions can coerce. A fine or threatened fine is a sanction and creates an involuntary association, whereas a withdrawn inducement only ends a voluntary association. The robber who threatens to kill me if I do not hand over my wallet is imposing an involuntary association on me, which is coercive. He denies me the option to have nothing to do with him. I may be unhappy if a former customer stops shopping at my store, but there is nothing coercive about her decision to stop conferring inducements on me since it doesn't force me to do anything.
Roberts' reasoning mistakenly described as coercion the termination of inducements paid to states not expanding Medicaid, an expression of the federal power of the purse. The threat of terminated inducements is not coercion, no matter how strong the incentives it gives to expand Medicaid. When no coercion exists it makes no sense to evaluate whether there is "too much" of it.
Justice Scalia's concurring opinion, like Roberts', confused withdrawn inducements with sanctions. Grudgingly admitting that the states had a choice, Scalia claimed that it was not a "real" choice.
Opining that "whether federal spending legislation crosses the line from enticement to coercion is often hard to determine," Scalia joined Roberts in concluding that "in this case there can be no doubt" that line had been crossed. But their inability to define the "line" which, if crossed, renders the federal funding power unconstitutional resembles Dewey B. Larson's sarcastic version of Heisenberg's Uncertainty Principle in physics — "It is impossible to ascertain with great precision the qualities of non-existent particles."
Since no coercion exists when only inducements or withdrawn inducements are involved, there was no line to be crossed here and the Court's inability to explain the location of that line is understandable. Unfortunately, sloppy thinking had consequences, with millions of Americans remaining uninsured thanks to the Court.
Readers who would like a more extensive explanation of the difference between coercive sanctions and withdrawn inducements are invited to read my 1973 discussion, "The Carrot and the Stick," which includes clarifying diagrams. The diagram of associations in that article was improved in later publications, including "Basic Political Concepts," a Global Text readable online from Hong Kong.
Paul F. deLespinasse is Professor Emeritus of Political Science and Computer Science at Adrian College. He received his Ph.D. from Johns Hopkins University in 1966, and has been a National Merit Scholar, an NDEA Fellow, a Woodrow Wilson Fellow, and a Fellow in Law and Political Science at the Harvard Law School. His college textbook, "Thinking About Politics: American Government in Associational Perspective," was published 1981 and his most recent book is "The Case of the Racist Choir Conductor: Struggling With America's Original Sin." His columns have appeared in newspapers in Michigan, Oregon, and a number of other states. To read more of his reports — Click Here Now.
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