Derailing a tax-funded gravy train

The Supreme Court will soon hear a case involving whether states must allow taxpayer dollars to fund Planned Parenthood. In Medina v. Planned Parenthood Atlantic South, the Supreme Court granted review to address a technical question: Does the Medicaid Act provide a private right of action for an individual to sue over the denial of their provider (in this case Planned Parenthood) or must they instead go through a state administrative procedure? While seemingly mundane, the question at the heart of the case is whether the states can direct limited Medicaid funds—funds intended to help low-income individuals obtain necessary medical assistance—away from abortion providers such as Planned Parenthood.

In 1965, Congress created Medicaid to assist low-income families with rising medical costs. Federal and state governments work together to administer the program: The federal government provides a portion of the funding while states provide the rest and administer the program. The Medicaid Act requires that state plans contain some 87 different components. In 1967, for example, Congress amended the Medicaid Act to require state plans to allow Medicaid recipients to get medical care from any qualified provider. This amendment is known as the any-qualified-provider provision. It left to the states, however, the determination of which providers were qualified.

The Medicaid Act is what is known as a Spending Clause statute. Because the federal government is one of limited and enumerated powers, it cannot direct the states to administer a program like Medicaid. Instead, the federal government uses funds to persuade the states. To protect the sovereignty of the states from federal overreach, the Supreme Court has held that the states must have clear and unambiguous notice of what the federal government is requiring in exchange for funds. States must be able to exercise actual choice.

The any-qualified-provider amendment has spawned confusion in the lower federal courts. Courts struggle to determine whether the amendment clearly creates a private right of action allowing individuals to file suit in federal court to challenge a state’s decision to disqualify a provider. If it doesn’t, then the provider must file an administrative appeal in state court (with ultimate review possible from the United States Supreme Court).

The case currently before the court began in 2018 when South Carolina’s governor issued an executive order directing the South Carolina Department of Health and Human Services to label abortion facilities “unqualified” to provide Medicaid services. This meant that abortion providers such as Planned Parenthood were unable to receive Medicaid funding in South Carolina. The disqualification makes sense. Abortion providers in South Carolina provide limited services—mostly abortion and contraception. Other federally funded medical facilities offer more comprehensive healthcare.

The lower federal courts sided with Planned Parenthood holding that South Carolina could not disqualify Planned Parenthood and deny it Medicaid funds. The courts held that the Medicaid Act created what is known as a private right of action allowing Medicaid recipients to file suit in federal court challenging the disqualification of a provider.

The state of South Carolina petitioned the Supreme Court to review the question. And for good reason. Just over a year ago, the Supreme Court explained what is required for a statute to create a private right of action. In Health and Hospital Corporation of Marion County v. Talevski, the court made clear that the bar is demanding: “Statutory provisions must unambiguously confer individual federal rights.” This makes sense because the states must be able to understand what the federal government is requiring in its Medicaid contracts. Opening the state up to suit in federal court is a big deal. So the Supreme Court requires what it calls “rights-creating” language that focuses explicitly on the individual beneficiary. The court also recognized that, for Spending Clause legislation, the usual remedy for state noncompliance with federally imposed conditions is not a federal lawsuit, but rather the federal government terminating funds to the state.

The state of South Carolina argues that there is no rights-creating language in the any-qualified-provider provision of the Medicaid Act. Instead, that statute imposes requirements on states. And as the Supreme Court has explained, the usual remedy for noncompliance is withholding federal funds. This is especially true where—as here—Congress has given disqualified providers like Planned Parenthood an alternative system of state administrative review. In short, the Medicaid statute does not clearly authorize individuals to file suit in federal court. That lack of clarity means South Carolina should prevail in the Supreme Court.

The Medicaid Act allows pro-life states like South Carolina to direct taxpayer funds away from Planned Parenthood and to medical providers offering real health-care services. States should be able to use taxpayer dollars in accordance with the will of their citizens and state law. They should not be forced to fund life-ending procedures like abortion.

Editor’s note: ADF and the author serve as counsel to the petitioners in this case.