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Douglas v. Independent Living Center of Southern California

A Health Affairs study (summarized by Reason) puts to rest the hoary claim that Medicare is more "efficient" than privately administered insurance programs: even without the high corporate executive pay and advertising of private insurance, Medicare's administrative expenses per enrollee are higher than private insurance. And that's before we get into the fact that Medicare underspends on fraud prevention, losing tens of billions a year that way.

Medicaid will get only more expensive if the Supreme Court affirms a Ninth Circuit decision in a pending case, Douglas v. Independent Living Center of Southern California. The Ninth held that Medicaid providers could sue states over their Medicaid reimbursement policies and ask for courts to adjudicate disputes over whether the states were complying with federal law—though the federal law has no such provision for private action. If so, that's a one-way ratchet for increased costs to state and federal taxpayers, with outlays being decided by judges even more unanswerable to voters than the existing regulatory mechanisms. Oddly, the Chamber of Commerce finds itself in the position of supporting an implied cause of action, arguing that one can enforce the Supremacy Clause in any preemption situation. It seems to me that the Solicitor General's brief has the better of the argument in suggesting that Ex parte Young-style suits are limited to cases where plaintiffs are claiming immunity under federal law to state regulatory action, rather than a broad cause of action to resolve inter-governmental disputes. It's hard to see where the Chamber's limiting principle is: if parties can sue states in an implied cause of action to force compliance with the parties' preferred statutory and regulatory construction, why can't parties sue other private parties in Buckman style claims over alleged regulatory non-compliance? So, yes, I'm siding with the Obama administration against the Chamber of Commerce. More: NYT, NCLC resource page; ABA resource page. The case will be argued at the start of the term on October 3.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.