Medicaid ruling could limit federal coercion — or not

The U.S. Supreme Court’s ruling upholding ObamaCare includes a restriction on using Medicaid funds to force states to adopt federal policies, notes School Law Blog. That could have implications for education spending.

In fact, just as they did at oral arguments in March over the Affordable Care Act, the justices in their opinions on Thursday raised several education laws and cases, making comparisons between the federal health insurance program for the poor and the Elementary and Secondary Education Act, for example. Some of the justices most critical of the health law also appeared concerned about an ever-expanding federal role in education.

The court ruled 7-2 that “the Medicaid expansion violates the U.S. Constitution by threatening the states with the loss of their existing Medicaid funding if they decline to comply with the expansion.”

“Congress may use its spending power to create incentives for states to act in accordance with federal policies,” the chief justice said. “But when pressure turns into compulsion, the legislation runs contrary to our system of federalism.”

However, the ruling may not give states much protection from federal coercion on education, opines Rick Hess.

The justices said that the feds can make new funds conditional, but can’t threaten to yank existing federal aid. Hmmmm. What happens when the feds rejigger funding formulas during a reauthorization and a state is now entitled to receive less funding–are states to be held harmless below their old baseline? If programs grow substantially over time, the new, “coercive” federal conditions will eventually apply to much or most of the funds. Is that a problem? What if the feds zero out one edu-grant program, but immediately launch a new, similar program. Since the program is “new,” are policymakers free to attach conditions to their hearts’ content?

States will be pressured to expand health coverage and spending, he predicts. That means there will be less money for K-12 and higher education.

About Joanne