As Democrats decide which parts of the big reconciliation bill to keep and which to drop, they need to consider legal risk—the risk that a provision will be struck down by the conservative majority on the Supreme Court. That, in fact, is a serious risk for one major part of the legislation: the extension of broader Medicaid eligibility into the 12 states that have refused to adopt the Medicaid expansion created under the 2010 Affordable Care Act.
It was the Supreme Court’s 2012 decision in NFIB v. Sebelius that enabled states to reject the expansion. After Medicaid was enacted in 1965, not all states immediately participated in the program; the last holdout, Arizona, finally established a Medicaid program in 1982. Once states joined, however, they had to accept dozens of changes to Medicaid enacted by Congress over the years if they wanted to get any federal funds under the program. But, ruling in 2012, the Court declared that the withdrawal of all Medicaid funds if states refused the new expansion would so burden the states that it violated their constitutionally guaranteed co-equal sovereignty.
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