Supreme Court rules government cannot penalize states who refuse to expand Medicaid spending

Neil Munro | White House Correspondent

Congress can subsidize the states’ expansions of Medicaid funding, but cannot penalize states who refuse to expand their spending, according to the Supreme Court’s June 28 decision on the constitutionality of Obamacare.

“What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding,” said the decision, authored by Chief Justice John Roberts.

However, “nothing in our opinion precludes Congress from offering funds under the [law] to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use,” said the opinion.

The impact of this complex Medicaid decision is unclear.

It may allow states to opt-out of the law, which greatly increases state and federal spending on health care.

The federal subsidies for state-level health care are slated to end by 2017.

Many GOP-led states have sought to opt-out from the law, and tried to persuade the court that the far-reaching law violates the constitution.

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