The Supreme Court ruling on Obama care is certain to produce some winners and losers.

Buried in the 196-page opinion of the Supreme Court, there is a surprise.  Even though the headlines are that the Supreme Court has upheld Obama care, the Supreme Court has reversed a part of Obama care related to Medicaid expansion.

Chief Justice John Roberts, joined by Justice Stephen Breyer and Justice Elena Kagan, concluded in Part IV that the Medicaid expansion violates the Constitution by threatening states with the loss of their existing Medicaid funding if they decline to comply with the expansion.

Here is the most relevant section from the 196 page opinion regarding Medicaid expansion:

Section 1396c gives the Secretary of Health and Human Ser­vices the authority to penalize States that choose not to participate in the Medicaid expansion by taking away their existing Medicaid fund­ing. 42 U. S. C. §1396c. The threatened loss of over 10 percent of a State’s overall budget is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion. The Government claims that the expansion is properly viewed as only a modification of the existing program, and that this modification is permissible because Congress reserved the “right to alter, amend, or repeal any provision” of Medicaid. §1304. But the expansion accom­plishes a shift in kind, not merely degree. The original program was designed to cover medical services for particular categories of vulner­able individuals. Under the Affordable Care Act, Medicaid is trans­formed into a program to meet the health care needs of the entire non elderly population with income below 133 percent of the poverty level. A State could hardly anticipate that Congress’s reservation of the right to “alter” or “amend” the Medicaid program included the power to transform it so dramatically. The Medicaid expansion thus violates the Constitution by threatening States with the loss of their existing Medicaid funding if they decline to comply with the expan­sion.

There may be significant opportunities in Medicaid HMOs.  Read more at Forbes

 

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