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Health Law’s Medicaid Expansion Debated by U.S. High Court

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March 28 (Bloomberg) -- U.S. Supreme Court justices grappled with whether Congress had the power to expand the Medicaid insurance program for the poor as part of President Barack Obama’s health-care law.

Twenty-six states are challenging the expansion on grounds it would coerce them into spending more of their tax money than they want to spend.

“Can you conceive of any state saying no” to additional federal Medicaid funds, Justice Antonin Scalia asked U.S. Solicitor General Donald Verrilli, who defended the measure. “And if you can’t, that sounds like coercion,” Scalia said.

The Medicaid argument wrapped up the third and final day of Supreme Court hearings on the health-care law. Earlier today, several justices indicated they may throw out other parts of the law if they strike down its core requirement that Americans obtain insurance.

The health law’s Medicaid expansion is designed to cover 17 million uninsured people by extending eligibility to those with incomes up to 138 percent of the federal poverty line. States that don’t comply with the expansion would lose all or part of their share of federal Medicaid funding.

During the debate on Medicaid, the justices divided along ideological lines, with those appointed by Democratic presidents defending Congress’s authority to expand Medicaid.

Justice Ruth Bader Ginsburg said she couldn’t recall a “federal program struck down because it’s so good it becomes coercive to be in it.”

Justice Stephen Breyer minimized concerns by the states that the government is wrongly coercing them if they refuse to participate in the health-care law’s expansion. Breyer said the 2010 health-care statute doesn’t add any threat to Medicaid funding that hasn’t been in the law since the mid-1960s.

To contact the reporters on this story: Laurie Asseo in Washington at lasseo1@bloomberg.net; Bob Drummond in Washington at bdrummond@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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