Supreme Court Health Care Challenge: What You Need to Know

To recap: If the individual mandate is struck down, the challengers of the law argue every other part of the law should fall. The government argues that only two popular provisions should fall and the Amicus counsel argues that every other provision should still be able to stand.

Paul Clement, the lawyer for the states, warned recently at an event at Georgetown University Law Center, "In all the excitement of the individual mandate, don't lose sight of this issue," referring to a part of the law that expands Medicaid.

No lower court has struck down the Medicaid expansion of the law, but the Supreme Court thought the issue was important enough to warrant an hour of oral argument.

Clement argues that Medicaid was established in 1965 as a cooperative federal-state partnership but the new law creates a "dramatic transformation" of that relationship. Beginning in 2014, states will be asked to cover all individuals younger than 65 with incomes up to 133 percent of the poverty level. Although the federal government will initially fund 100 percent of that expansion, by 2017, states will be responsible for 5 percent of those costs, with that number increasing to 10 percent by the end of the decade.

Congress made the new terms a condition of continued participation in Medicaid. Opponents say the government is forcing the states to participate because no state could reasonably expect to withdraw from the program. "The ACA threatens states with the loss of every penny of federal funding under the single largest grant-in-aid program in existence, literally billions of dollars each year, if they do not capitulate to Congress' steep new demands," Clement writes.

And he says the law provides no means, other than Medicaid, for the nation's neediest residents to obtain insurance and thereby comply with the mandate.

"Fear not," Clement writes with sarcasm, "Congress' failure to provide an alternative to Medicaid was a product of neither imprudence nor oversight. Congress did not provide an alternative because it understood that it had not given states any meaningful choice to opt out."

The government argues, however, that although Medicaid has expanded over the years, many low-income individuals have remained ineligible. So Congress addressed the crisis by extending Medicaid eligibility to certain individuals.

It argues that the federal government will bear nearly the entire cost of medical assistance for individuals made newly eligible and that the states' spending on Medicaid "will be offset by other savings the states will achieve as a result of the ACA's reforms."

The government says that from the outset, Congress specifically reserved the right to "alter, amend or repeal" any provision of the Medicaid Act and that states "remain free to opt out of Medicaid if they so choose."

The 11th Circuit Court of Appeals rejected the states' claim in part because states were warned from the beginning that Congress reserved the right to make changes to Medicaid, that the federal government will bear nearly all the costs associated with the expansion and that the states have the power to tax and raise revenue and, therefore, can create and fund programs of their own if they do not like Congress' terms.

3. Sleeper issue: Could the court rule that a challenge to the mandate is premature?

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