By Anne Swerlick, Florida Legal Services

Last week I had a front row seat in Judge Vinson’s Pensacola federal courtroom where arguments were heard on cross motions for summary judgment in Florida v. Sebelius.  In contrast to the rather modest number of spectators in the courtroom, there was literally an army of lawyers from all over the country representing the plaintiff twenty states, as well as a business organization and two individuals. Blaine Winship, from Florida’s AG office and David Rivkin Jr., a D.C. based private attorney, presented oral argument on behalf of the plaintiffs.  A mere four Department of Justice (DOJ) attorneys were present in the courtroom including Ian Gershengorn who argued on behalf of the federal government.

The court’s October 14, 2010 Order on Defendants’ Motion to Dismiss gave a good preview of the legal arguments heard on summary judgment. That order authorized two counts to go forward – one on the Affordable Care Act (ACA) individual responsibility provision (aka mandate) and the other on the Medicaid program. Consistent with his earlier ruling, at the summary judgment hearing, the Judge appeared to be persuaded by plaintiff’s’ arguments on the individual responsibility provision, but highly skeptical of their constitutional challenge to the Medicaid provisions.

Plaintiffs contend that the ACA Medicaid amendments exceed Congress’ Spending Clause authority. Specifically, they allege that states are being forced into a new, “drastically transformed” and “costly” Medicaid program. The right to opt out, they argue, is illusory because states cannot realistically walk away from substantial Medicaid federal funding necessary to support their neediest residents. What plaintiff’s’ counsel lacked on case law support, he made up for with repeated reliance on cliché catch-phrases, e.g.,  states are faced with a “Hobson’s choice,” they have been denied “free and unfettered choice” about whether to accept the new Medicaid terms, Congress has put states in a “bait and switch situation,” ” a contract of adhesion” and he questioned whether “the carrot of federal funding” [had] become a stick.”

In response, Judge Vinson noted that in fact some states were contemplating withdrawing from the program, while others reported they will save money under the ACA. He also noted that for the first few years the federal government will pay the full costs of the expanded Medicaid enrollment. He expressed concern on how a court would “measure” coercion and apply it as a legal standard.  Would it necessitate looking at individual state circumstances? He also commented that multiple appellate courts have denied similar spending clause challenges involving various states’ Medicaid programs.

The Florida AG countered that “original” Medicaid was at issue in those earlier Spending Clause cases and that Congress should have offered states the choice to sign on for the new Medicaid program. With regard to the cost issue, the AG said that cost projections relied on by the defendants did not consider “the elephant in the room.” He explained that under the ACA states will have new responsibilities for the provision of services (not just reimbursement) and will open the states up to more liability for the lack of a sufficient number of Medicaid providers.  (In fact, this ACA provision was not a change in the law, but clarifying language added in response to recent federal court decisions applying overly restrictive interpretations of states’ responsibilities under federal Medicaid law).

The DOJ attorney emphasized that there are no cases which have invalidated a federal spending program based on plaintiff’s’ coercion argument and that finding an appropriate legal standard to measure coercion “plunges courts into endless difficulties.” DOJ called the plaintiffs’ assertions about the “transformative” nature of the Medicaid amendments under ACA to be “preposterous,” noting that Congress has a long history of defining the “categorically needy” and asked why individuals earning just $14,000 per year (133% FPL) would not be considered “needy?” The Judge commented that some states were considering opting out of Medicaid and asked whether that was contrary to the intent of the ACA. DOJ responded that no one wants states to opt-out, but the fact that states are considering it demonstrates that this is not a case of coercion.

Both sides also addressed the issue of “severability.” DOJ argued that a “meat-axe” approach (declaring the entire ACA law unconstitutional as urged by plaintiffs) would be inconsistent with Supreme Court standards and that the Medicaid expansion provisions do not depend on implementation of the individual mandate. In response to the Judge’s question on whether Congress would have passed the Medicaid expansion without the individual mandate, DOJ argued that this is not a judicially manageable test, nor a proper inquiry for the court. The Judge seemed to agree.  

At the end of the arguments, the Judge complimented the attorneys on their oral presentations and briefs and also recognized the high quality of the amici briefs filed in the case. He stated that he would rule as quickly as possible.

In the meantime, people continue to fall through the cracks. As I’m finishing up this blog, I’ve taken a quick phone call from another Florida health law attorney who is trying to help his client with paraplegia. The client is on the verge of having his wheelchair and other essential medical equipment repossessed because his SSI and Medicaid are terminating and he is not yet eligible for Medicare. Medicaid expansion can’t happen soon enough in Florida!   

The views expressed by Guest Bloggers do not necessarily reflect the views of the Center for Children and Families.