by Mitch Kokai
Senior Political Analyst, John Locke Foundation
John Daniel Davidson reports for National Review Online on the Affordable Care Act’s continued negative impact on state policymakers.
Last week, Texas filed a lawsuit against the federal government — again. This time, over a regulation that forces states to pay an Obamacare tax on Medicaid managed-care plans. If states refuse, they could lose their Medicaid funding. Sound familiar?
The complaint, which Kansas and Louisiana also joined, reveals how progressive regulatory schemes such as the Affordable Care Act (ACA), in order to accomplish their goals, eventually wind up coercing state governments and in some cases imbuing private entities with legislative powers. In this case, the Obama administration finds itself in the awkward position of levying a federal tax on state Medicaid programs designed to provide health care to the poor and disabled. If states refuse to pay up, a substantial amount of their budgets would be in jeopardy.
We’ve been here before. In 2012, the Supreme Court called this sort of thing “economic dragooning” that leaves states no choice but to pay. In NFIB v. Sebelius, the issue was Medicaid expansion. If states didn’t expand their programs as mandated by the ACA, they would lose all Medicaid funds. Chief Justice John Roberts called this a “gun to the head” — it amounted to unconstitutional coercion that violated the principle of federalism. That was a big deal, because no previous Court had ever delineated the limits of conditional federal funding to the states, otherwise known as “cooperative federalism.”
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