States Prepare Court Challenge to Health Care Bill

Sen. Ben Nelson (D-Neb) was one of the holdouts blocking Senate passage of the president’s health care “reform” measure.  His pro-life stance seemed a show-stopper but after some language was added — weaker than the House “Stupak” provision which clearly blocks federal funding of abortion — Nelson was on the fence.

Hence the “Cornhusker Kickback” which exempts Nebraska — at the expense of the other 49 states — from the financial impact of the bill on Medicaid.

Top law enforcement officials in fifteen states have a different view of the so-called “Cornhusker Kickback:”  It’s unconstitutional, they say, and if the provision survives the conference between the Senate and the House and is signed into law, the state attorneys general will take it to court.

“A lot of us were really puzzled by a deal struck in the Senate that gives a tremendous advantage to Nebraska at the disadvantage of the other 49 states,” South Carolina State Attorney General Henry McMaster, the leader of the legal assault on the “Cornhusker Kickback,” told me last week. “If it became law, every state except one would be paying their share of Medicaid and a portion of Nebraska’s as well.”  

Although McMaster had his own doubts about the Senate measure, a letter to him from South Carolina’s Republican Senators Jim DeMint and Lindsay Graham questioning the fairness of legislation favoring one state over all the others was the spark that prompted him to take action.  

So last month, McMaster (who is also the front-running Republican candidate for governor in the primary this June)  began contacting fellow attorneys general nationwide.  On December 30, McMaster, Greg Abbott of Texas and Rob McKenna of Washington State and the Republican attorneys general of ten other states wrote House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid expressing “grave concern” with the Senate-passed health care bill and serving notice that they “are contemplating a legal challenge” to the Nebraska-related provision.

“We ask you to take action to render this challenge unnecessary by striking that provision,” McMaster and his fellow attorneys general wrote Pelosi and Reid.  The thirteen top law enforcement officials (who have since been joined by Drew Edmondson, Democratic attorney general of Oklahoma, and Arthur Ripley, Jr., attorney general of American Samoa) would end their talk of going to court if the “Cornhusker Kickback” were dropped.  As McMaster and the other attorneys general wrote Pelosi and Reid December 30, “[w]e ask you to take action to render this challenge unnecessary by striking that provision.”

But that letter is unlikely to be considered — or at least that was the strong signal sent last week by the top spokesman for another major Democratic player in the health care debate, Barack Obama.

At the White House briefing of reporters on January 5, Fred Lucas of the CNS News cited the letter from the thirteen attorneys and asked Press Secretary Robert Gibbs if the President felt the Nebraska clause was constitutional.

“I have not talked to the President specifically about the letter from the attorney generals [sic],” Gibbs told Lucas, “I do not believe that anybody has legitimate constitutional concerns about the legislation [italics added].”

“Is he supportive of the Nebraska language then?” Lucas asked.

“He’ supportive of the Senate bill,” said Gibbs, “So I don’t know what that leads you to conclude.”  

When I read Gibbs’ quote to McMaster last week, he shot back without hesitation: “Case law says otherwise.”

As he did in the December 30th letter, the South Carolinian cited the case of South Dakota v. Dole, (1987), in which the Supreme Court stated, “that conditions on federal grants might be illegitimate if they are unrelated to the federal interest in particular national projects or programs.”

“So the federal interest in the health care bill is not simply requiring universal health care,” said McMaster, “but also ensuring that the states share with the federal government the cost of providing such care to their citizens. This federal interest is evident from the fact this legislation would require every state, except Nebraska, to shoulder its fair share of the increased Medicaid costs the bill will generate. The provision of the bill that relieves a single state from this cost-sharing program appears to be not only unrelated, but also antithetical to the legitimate federal interests in the bill.

McMaster and his fellow attorneys general also believe that a court case against a bill containing the Nebraska provision would be given a boost by Helvering v. Davis (1937), in which the Supreme Court warned that Congress does not possess the right under the Spending Power to demonstrate a “display of arbitrary power.”  

Although the spending power of Congress includes authority to “accomplish policy objectives by conditioning receipt of federal funds on compliance with statutory directives, as in the Medicaid program,” McMaster and the others point out that Helvering makes clear that the power in not unlimited and “must be in pursuit of the ‘general welfare.’”  

“So, in other words, there must be a good reason for a distinction in the spending power,” McMaster told me, “and I would say that buying a senator’s vote is not a good reason.”

“Based on the Helvering and Dole cases as well as the due process, equal protection, privileges and immunities clauses and other provisions of the Constitution, he concluded, “the ‘Cornhusker Kickback’ is unconstitutional.”

Throughout our interview, McMaster stressed to me that he and his fellow law enforcement officials would not file a suit if the controversial provision were eliminated and that there argument was with that alone.  But he did add that based on the same grounds, people in other states might well launch legal assaults on the “Louisiana Purchase” (the portion of the bill favoring the Pelican State that won over its Democratic Sen. Mary Landrieu) or the part of it in which the Medicaid Advantage program is phased out in all states but Florida.

“And it doesn’t take an attorney general to get mad and go out and do something about this,”  he told me, “You could do that.”