Is ObamaCare's Medicaid Expansion Unconstitutional?

The 26 states who've signed onto a group challenge to the law in court are arguing that it's not merely ObamaCare's individual insurance mandate that's unconstitutional. Their suit also charges that the law's Medicaid expansion, which expands the joint federal-state health program for the poor and disabled to cover everyone earning up to 133 percent of the poverty line, is legally suspect as well. In the past this argument hasn't gotten much traction. The Examiner's Philip Klein explains:

Paul Clement, the former solicitor general who represented the states, argued that the Medicaid money represents such a large amount of their budget, that they can't realistically refuse to accept it. Furthermore, he said that the problem with the law is that it doesn't merely say that if states don't expand Medicaid, they don't get any new money. It says, if states don't expand Medicaid, they lose all their Medicaid funding, even that which existed before the expansion passed. If Congress had tied the choice to accept new beneficiaries to the new money instead of the preexisting funding, Clement argued, they wouldn't be challenging the law.

The government has argued in response that Medicaid is voluntary, and that if states don't like the new expansion, they can drop out of the program. Even Judge Roger Vinson, who ruled against the mandate and struck down the entire law as a result, agreed with the government's logic. It's clearly a weaker argument. 

But it may still have legs. A panel of judges at an appeals court in Atlanta heard arguments on the case yesterday and reportedly seemed more open to the case against the law's Medicaid expansion: 

The panel also showed sympathy to a secondary claim in the states' case involving Medicaid. The plaintiffs say the law's expansion of Medicaid to 16 million lower-income Americans unfairly burdens states, which eventually must pay some of the medical costs for those new beneficiaries.

Judge Vinson ruled against the plaintiffs on that part of the case. But Judge Dubina said states had made a "powerful" argument that such an expansion amounted to coercion.