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Lou Cannon: Supreme Court Gives States Wiggle Room on Medicaid, Immigration

Rulings on Obamacare, Arizona's SB 1070 provide crucial latitude but are unlikely to create a climate of cooperation

Let’s hear it for the U.S. Supreme Court. Whatever one’s view of the overall merit of its rulings on the Patient Protection and Affordable Care Act (PPACA) and the Arizona immigration law, the court in both cases performed a tricky feat of deferring to the federal government while allowing much-needed running room to the states.

This latitude is of particular consequence in the planned expansion of Medicaid, the federal-state program that provides health care for the poor. Even without the PPACA, Medicaid has been “overwhelming state budgets,” observes Melissa Hansen, an expert on health-care issues with the nonpartisan National Conference of State Legislatures. Writing in the June issue of State Legislatures, the NCSL magazine, Hansen said that Medicaid spending accounted for 15 percent of state general funds and 21 percent of total state spending if federal funds are included. States have reduced benefits, limited eligibility and reduced payments to hospitals and other providers to make ends meet; 10 states were nonetheless forced to make midyear revisions to their 2012 budgets to close Medicaid gaps.

The PPACA, the health-care law passed by Congress in 2010 on a party-line vote, is for better or worse the signal achievement of the Barack Obama presidency. Republicans challenged the law’s constitutionality, with states leading the way. Most of the subsequent debate about the law — and most media coverage — has focused on the law’s requirement, known as the individual mandate, that everyone have health insurance.

But the administration goal of insuring 32 million uninsured Americans depends more upon Medicaid expansion than on the mandate, which the Supreme Court decided was, in reality, a tax. Under the PPACA, anyone whose income is 133 percent above the poverty line or less is eligible for Medicaid. An estimated 17 million presently uninsured Americans would be brought into Medicaid under the law, compared to 15 million compelled to buy insurance because of the mandate.

Few anticipated that Medicaid expansion would be quite so vast. At the time of the bill’s passage, Obama believed the United States was well on the road to economic recovery, which presumably would have lowered the poverty rate. Instead, continued high unemployment raised the poverty level in 2012 to $23,050 for a family of four. Applying the 133 percent above the poverty line standard of the health-care law, any family of four with an annual income of $30,650 or less would be Medicaid-eligible.

States still struggling to balance their budgets in the wake of the Great Recession may be unable to afford these added Medicaid burdens, but Chief Justice John Roberts’ skillful decision upholding the law gives them an out. As written, the law required states to accept the expansion to the 133 percent standard or lose all federal Medicaid funds. Roberts found this unfair. Under his ruling, states can reject the new standard and the funding that goes with it without losing present funding for Medicaid. The 5-4 decision upholding the law pleased the White House and stirred new determination among Republicans to win the November elections and repeal it. But on both sides of the partisan divide, the decision produced a sigh of relief in the states. As NCSL director William Pound expressed it, the major impact of the court’s decision on states will be to allow more flexibility in Medicaid at a time such flexibility is necessary.

Earlier in the week, the Supreme Court also allowed states wiggle room on immigration. Justice Anthony Kennedy’s decision, on Arizona’s SB 1070, most of it approved by a 5-3 majority, affirmed the primacy of the federal role for immigration policy and enforcement and in so doing followed precedent and historical practice. Federal courts have long rebuffed state efforts to single out illegal immigrants for special treatment. In 1994, for instance, California voters approved Proposition 187, which would have denied education and health benefits to illegal immigrants. Three years later a federal judge declared Proposition 187 unconstitutional, saying that “California is powerless to enact its own legislative scheme to regulate immigration.”

Echoing this sentiment in similar language, Kennedy chided Arizona for introducing “intrusions on the federal scheme” of immigration policy. His decision struck down key provisions of Arizona’s SB 1070 that would have made it a state crime for illegal immigrants to fail to register with the federal government or to seek or hold jobs without proper documentation. Also stricken was a provision of the Arizona law that would have allowed police to arrest without a warrant anyone they suspected of being deportable.

These provisions were blocked last year by the Ninth U.S. Circuit Court of Appeals, which also invalidated the supposed “show me your papers” centerpiece of the law, empowering police officers to inquire about the immigration status of persons they lawfully detain. The Supreme Court overturned the Ninth Circuit on this provision; the only surprise of the ruling was that the court did so unanimously in an unlikely alliance of liberals and conservatives.

But there is widespread uncertainty about what lies ahead. Several police chiefs, in Arizona and elsewhere, have complained that the law unduly burdens police. Rank-and-file cops are almost guaranteed to resent the added duties of inquiring about immigration status, especially since their only power if they find an illegal will be referring the case to federal authorities. SB 1070 permits police inquiries into immigration status only if the officer believes the person he is detaining might be in the United States illegally. This is a subjective standard, one that Latinos say could encourage racial or ethnic profiling. Civil liberties groups are poised to file lawsuits if this happens, and Kennedy warned that the court would revisit the law if profiling occurs.

Five other states — Alabama, Georgia, Indiana, South Carolina and Utah — have laws that replicate the “show me your papers” feature of SB 1070. They have been on hold, except in Alabama, and presumably will now be revisited by courts and policy makers in light of the Supreme Court ruling. These other laws are not simply copycats of the Arizona statute. Utah, for instance, has a broad-gauged immigration policy that seeks to treat illegal immigrants humanely, even allowing them driving privileges.

Alabama has the most problematic and far-reaching law. Among other things, it requires public schools to check the immigration status of students and limits business contracts with illegal immigrants. The aim of the law was, frankly, to drive illegal immigrants out of Alabama, which it may be doing. Nonetheless, one of the Alabama law’s principal sponsors, state Sen. Scott Beason, R-Gardendale, admits to uncertainty in the wake of Kennedy’s ruling. “The Supreme Court came down solidly committed to both sides, not solidly for either side,” Beason told The New York Times.

Proposed immigration measures, many emulating the Arizona law, were introduced in 24 other states during the past two years. Most did not advance as advocates and adversaries alike awaited the Supreme Court ruling on SB 1070. Nor is action likely now in an election year in which legislators are running in new reapportioned districts. But Sheri Steisel, director of NCSL’s Task Force on Immigration and the States, anticipates a spate of new state bills on immigration in 2013, carefully drawn to meet the constitutional requirements set forth by Kennedy.

States have an “unabated interest” in immigration policy, Steisel said, and are frustrated by the failure of Congress and the White House to step up to the plate. Perhaps Kennedy’s emphasis on the federal responsibility for immigration will encourage the next president, whether his name is Obama or Romney, to propose a comprehensive federal bill as President George W. Bush did in 2005. But don’t hold your breath.

State legislatures were once famously celebrated by Justice Louis Brandeis as “laboratories of democracy.” Historically, states were more apt to practice consensus than Congress, and they pioneered in experiments such as unemployment insurance and bank deposit insurance that were later woven into the fabric of national policy.

Now, following the congressional trend, legislatures are more partisan and ideologically polarized than they used to be; they have become “laboratories of conflict,” in the words of Alan Rosenthal, professor of public policy at the Eagleton Institute of Politics at Rutgers University. In their bold rulings on health care and immigration, the Supreme Court left plenty of space for these conflicts to continue when legislatures next convene.

— Summerland resident Lou Cannon is a longtime national political writer and acclaimed presidential biographer. His most recent book — co-authored with his son, Carl — is Reagan’s Disciple: George W. Bush’s Troubled Quest for a Presidential Legacy. Cannon also is an editorial adviser to State Net Capitol Journal, which published this column originally.

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