In a major new test of federalism in the Supreme Court, five states on Friday asked permission to file a lawsuit against the federal government directly in the Court, to challenge the constitutionality of a key feature of the new Medicare “Part D” prescription drug program.
Under the new drug law, enacted in 2003, states must pay part of the costs of federal Medicare drug coverage for persons receiving either Medicare (old age) or Medicaid (low income) medical benefits. If a state falls to make those required payments, the amount of the default — plus interest — will be deducted from any Medicaid payments the government would have paid to the state.
The new lawsuit, Texas, et al., v. Leavitt (135 Original), challenges this offset provision, the so-called “clawback” requirement. Texas is joined in the case by Kentucky, Maine, Missouri and New Jersey. Simultaneously, 10 other states filed a brief as amici, supporting the states’ legal claims. The motion to file the original complaint, together with the complaint itself and related papers, can be found here. The brief of amici can be found here. A statement to the press by Texas Attorney General Greg Abbott can be found here.
Here are the questions the lawsuit presents:
“1. Is the ‘clawback,’ an unconstitutional tax against the states in their sovereign capacities?
“2. Does the clawback impermissibly commandeer state legislatures to fund the federal Medicare program?
“3. Does the clawback violate the Constitution’s Guarantee Clause by improperly usurping control of essential functions of state government?”
In the brief supporting the lawsuit, the states argue: “The clawback payment erodes the states’ sovereignty and threatens their rightful place in our federal structure. Through the unambiguous language of the clawback, Congress demands that the states shall remit a monthly check to fund a purely federal benefit program. The clawback is assessed against states because they are states, in direct contravention of the states’ longstanding rfght not to be taxed by the federal government….The clawback’s infringment on the states’ sovereignty is not merely theoretical. It interferes with the most fundamental state function — command and control of the state fisc.”
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