Conservatives disappointed by the Supreme Court upholding most of Obamacare can take solace in one small victory. The court did strike down the portion of the law allowing the federal government to punish states for not going along with a Medicaid expansion embedded in the law by cutting Medicaid funding.
The Obamacare law called for the states to expand their Medicaid programs to serve as a catchall for people who couldn’t afford to buy their own insurance despite the mandate. Originally the law allowed the feds to remove all of a state’s federal Medicaid funding if they didn’t comply. The Supreme Court ruled that such a move would represent unconstitutional federal coercion of the states, and a good thing too. This expansion of Medicaid is something most states can’t afford. In fact, it was a bit of policy sleight-of-hand on the part of the feds, hiding a good chunk of the cost of Obamacare by shoving it off onto the states.
If the states refuse to expand Medicaid, and if they refuse to implement the health care exchanges, they can keep the federal government from shifting the burden onto state budgets. In fact, according to some, the Supreme Court striking down this Medicaid provision could destabilize the Obamacare law to the point of failure, but only if the state refuse to go along.
Several Republican governors have already (and rightfully) announced that they want no part of it.
“While the court said it was legal, that doesn’t make it right,” announced Wisconsin Governor Scott Walker saying his state wouldn’t expand Medicaid or implement the exchanges. “For us to put time and effort and resources into that doesn’t make a lot of sense.”