Court took a functional approach, noting that the exaction for being uninsured is paid to the Treasury when taxpayers file their tax returns; it does
not apply to individuals who do not pay federal income taxes; it is determined by familiar factors such as number of dependents, taxable income
and joint filing status; it is found in the Internal Revenue Code and enforced
by the IRS; and it produces at least some revenue for the Government.
Finally, in a surprise move, the Court reversed the Eleventh Circuit’s decision and held the ACA’s “Medicaid expansion” was unduly coercive on
13 The Medicaid expansion provision requires states that have not
already done so to expand Medicaid to non-disabled, non-elderly adults
with incomes below roughly 138% of the federal poverty level (FPL).
Court remedied the coercion by enjoining the federal government from
withholding federal funding to a state refusing to expand, thus effectively
making the expansion a state option.
NFIB is still reverberating. Currently, twenty-one states are refusing to
16 The states’ decision not to expand Medicaid raises a
number of questions regarding health care financing and health status in
these states, including how far the federal government is willing to go to
bring states into the expansion fold. An increasing number of states are
pressuring the federal government to allow them to expand Medicaid
through a provision of the Social Security Act that authorizes the Secretary
of the Department of Health and Human Services to allow states to implement experimental projects that are consistent with the objectives of the
17 For example, the federal government has approved Iowa’s
request to expand Medicaid through a premium assistance program that
asks individuals with very low incomes to pay premiums for coverage—
even though the Medicaid Act prohibits the imposition of such premiums.
Every approval of this kind sets the stage for another state to press the fed-
12. Id. at 2593-600.
13. See id. at 2608.
14. Id. at 2601 (discussing 42 U.S. C. A. § 1396a(a)( 10)( A)( i)(VIII)). Note that while
NFIB states that the threshold is 133% of the FPL, under the ACA, the first five percent of
income is disregarded, effectively making the threshold 138% of the FPL. See §
1396a(e)( 14)(I)( i).
15. See id. at 2607-08. As written, states had to accomplish their Medicaid expansions
by January 1, 2014. § 1396a(a)( 10)( A)( i)(VIII)).
16. See Advisory Bd. Co., Where the States Stand on Medicaid Expansion (Feb. 7,
2014, 12: 44 PM), http://www.advisory.com/daily-briefing/resources/primers/medicaidmap.
17. See 42 U.S. C. A. § 1315.
18. Compare Letter from Marilyn Tavenner, CMS Administrator, to Jennifer Vermeer,
Iowa Medicaid Director (Dec. 30, 2013), available at
plan-ca.pdf (authorizing state to use premiums) with 42 U.S. C. A. §§ 1396o, 1396o- 1 (
prohibiting state Medicaid programs from implementing premiums on populations with incomes
below the federal poverty level).