360 Holding Health Insurance Marketplaces Accountable 2015
nal action, such as approving a State Plan Amendment.177 Instead, plaintiffs
would be required to bring a claim under the Administrative Procedure Act
(“APA”).178 In Douglas, the Court granted certiorari on the question of
whether the Supremacy Clause provides an implied cause of action for
Medicaid beneficiaries to enforce the reasonable rate requirements.179 But
before the Court decided the case, CMS approved the state plan containing
California’s provider rate cuts.180 The Court remanded the case to the Ninth
Circuit to consider the new posture and specifically asked whether the final
agency action required the plaintiffs to bring an APA claim rather than a
Supremacy Clause claim.181 If the Court ultimately adopts this line of reasoning, this decision will limit the reach of Supremacy Clause claims. Due
to CMS’s limited ability to effectively review state Medicaid plans and its
tendency to simply provide a rubber stamp,182 plaintiffs will be required to
pursue APA suits, which are highly deferential to the federal agency.183 Despite these potential limitations, the Supremacy Clause and § 1983 remain
important options to enforce at least some provisions of the Medicaid Act.
III. THE NEED FOR LITIGATION TO ENFORCE RIGHTS ON THE
As in the Medicaid context, individuals will need to rely on private enforcement to ensure their due process rights are protected when applying
for health insurance on the Marketplaces. First, the stakes are similar: Marketplaces, like Medicaid agencies, are making eligibility determinations
about health care coverage. The ACA introduced the Marketplaces as important players in delivering health insurance to low-income individuals.184
The Marketplaces are essentially online markets where people can shop for
177. See Douglas v. Indep. Living Ctr., 132 S. Ct. 1204, 1210 (2012) (“The federal
agency charged with administering the Medicaid program has determined that the challenged rate reductions comply with federal law. . . . [ I]t may require respondents now to proceed by seeking review of the agency determination under the Administrative Procedure Act
(APA) . . . rather than in an action against California under the Supremacy Clause.”).
178. Id.; see also Catherine M. Sharkey, Preemption as a Judicial End-Run Around the
Administrative Process?, 122 YALE L.J. ONLINE 1, 4 (2012) (“One reason for courts to entertain direct preemption challenges under the Supremacy Clause . . . is to enable courts to enjoin the states from acting until the administrative process concludes.”) (emphasis added).
179. Douglas, 132 S. Ct at 1207.
181. Id. at 1211.
182. See supra Section II. A.1 (discussing the difficulties with HHS enforcement of the
183. See, e.g., Thomas W. Merrill & Kristin E. Hickman, Chevron’s Domain, 89 GEO.
L.J. 833, 833 (2001) (“The Supreme Court’s decision in Chevron U.S. A. Inc. v. Natural Resources Defense Counsel, Inc. dramatically expanded the circumstances in which courts
must defer to agency interpretations of statutes.”).
184. See 42 U.S. C. A. § 18031(b)(1) (West, WestlawNext through P.L. 113-174).