On Monday, the Supreme Court denied certiorari in Texas v. IRS Commissioner, a case about whether the federal Department of Health and Human Services improperly delegated to an outside board of experts the power to determine whether states like Texas are running their Medicaid programs in a financially responsible manner. The order dismissing Texas’s challenge leaves the state no choice but to do what it hates: pay for poor people’s healthcare.
Not all states administer their own Medicaid programs; many, like Texas, outsource that role by contracting with private healthcare companies instead. For those states, a set of 2015 Affordable Care Act regulations require them to cover certain tax obligations incurred by their private partners; states that run their own healthcare systems are exempt from this obligation. The department tasks an outside entity called the Actual Standards Board with setting rules to determine how much each state should pay. Texas, resentful of this obligation, challenged the Board’s authority to calculate the fees it owed as an improper delegation of federal power.
Justices Samuel Alito, Clarence Thomas, and Neil Gorsuch ultimately concurred with the Court’s decision to deny review, citing statutory limitations on Texas’s claim and Congress’s repeal of the relevant regulation. But an accompanying statement written by Alito, which expresses interest in revisiting the issue in a case that presents fewer “complications,” makes clear their desire to curb the power of the Board and everything that looks like it. Their invocation of the so-called “nondelegation doctrine” in this context is part of the conservative legal movement’s larger effort to roll back the administrative state, thereby allowing the Court to strike down policy choices with which its conservative majority disagrees.
The nondelegation doctrine is a dubious legal theory about the limitations of a given branch of government transferring its power to someone or something else. Its ostensible rationale is about democratic accountability; usually, these cases are about whether Congress, as the body most accountable to voters, has improperly delegated its legislative authority to the executive branch. Concurring with the Court’s decision to block implementation of the Biden administration’s vaccine-or-test rule this January, Gorsuch praised the nondelegation doctrine as a principle that “ensures democratic accountability by preventing Congress from intentionally delegating its legislative powers to unelected officials.”
This, Alito and company argue, is more or less what happened here, too. “What was essentially a legislative determination—the actuarial standards that a State must meet in order to participate in Medicaid—was made not by Congress or even by the Executive Branch but by a private group,” he wrote. “And this was no inconsequential matter. It has cost the States hundreds of millions of dollars.”
Rolling back the administrative state has long been a pet project of the right, which would much rather live in a world unencumbered by the sorts of rules administrative agencies hand down. However, this case provides a new example of how conservative attorneys general can invoke the doctrine to avoid spending more money than a state would like on poor people’s healthcare. Texas is trying an ambitious little two-step here: delegating a critical government function to for-profit healthcare companies, and then trying to use the private non-delegation doctrine to weasel out of paying its fair share of the associated costs.
Advocates of the private nondelegation doctrine often argue that private organizations lack the accountability of executive branch agencies. But here, Texas is complaining about a problem of its own creation. The taxes that states like Texas face come out to large sums of money—up to one-third of a given state’s budget, as Texas noted in its petition for certiorari. If Texas would like to avoid writing that check, it could simply decide to do the work of governing and administer Medicaid itself. Instead, the state appealed to its conservative allies on the Court for a break. It didn’t work this time, but if the Alito-Thomas-Gorsuch statement is any indication, the next state to take on a structure like this one will do so before a friendly audience.