Court below correctly found that the ACA is unconstitutional, because its individual mandate is not a valid regulation of economic activity. However, the ACA suffers from a second, equally fundamental constitutional flaw resulting from the ACA’s dramatic expansion of the Medicaid Program. The ACA’s ambiguity and indefiniteness renders it illegitimate under well- established Supreme Court Spending Clause jurisprudence. The legitimacy of Congress’s power to legislate under its spending power rests on whether states voluntarily and knowingly accept the conditions imposed upon them in return for their acceptance of federal funds. For there to be a voluntary and knowing acceptance, Spending Clause legislation requires that federal conditions be sufficiently clear and definite so that elected representatives of their citizens and taxpayers can make an informed decision of whether to accept the funds, being cognizant of the consequences. The ACA’s ambiguity prevents states from making a clear and informed choice, requiring North Carolina and Minnesota to subject themselves to unknowable and potentially crippling obligations in order to continue their participation in the Medicaid program.
The ACA’s radical expansion of Medicaid exceeds Congressional authority under the Spending Clause and thus violates the Tenth Amendment. This is because “‘legislation enacted pursuant to the spending power is much in the nature of a contract,’ and therefore, to be bound by ‘federally imposed conditions,’ recipients of federal funds must accept them ‘voluntarily and knowingly.’’’ “States cannot knowingly accept conditions of which they are ‘unaware’ or which they are ‘unable to ascertain.’”
In determining whether statutory conditions are clear enough to ensure a knowing and voluntary acceptance, they must be viewed “from the perspective of a state official who is engaged in the process of deciding whether the State should accept [federal] funds and the obligations that go with those funds.” The ACA is too vague and indefinite to satisfy these requirements, providing Federal officials with a virtual blank check in construing and implementing many of its provisions, and extending their reach. Federal officials also have vast discretion to waive key provisions of the bill, which they have repeatedly done on a temporary, ad hoc basis. This ambiguity and indefiniteness makes it impossible for states to be cognizant of the ACA’s future consequences, which are inherently unknowable.
These ambiguities and unbridled discretion further make it impossible for states to predict what mandates or fiscal burdens states will incur under the ACA if they remain in the Medicaid program. This ambiguity is aggravated by the fact that the federal government has used rulemaking to render the ACA’s apparent limits illusory (such as imposing by rule a controversial provision that was deleted from the ACA prior to its passage). The ACA’s vagueness is aggravated by its enormous complexity, massive scope, and unpredictable cost.