How did the Supreme Court change the Medicaid expansion remedy for states that refused to participate?

In the case of National Federation of Independent Business et al. v. Kathleen Sebelius, the Supreme Court addressed the constitutionality of the Medicaid expansion under the Affordable Care Act. The Court found that the original provision was unconstitutionally coercive because it allowed the Secretary of Health and Human Services to withhold all federal Medicaid funding—including existing support—from states that chose not to participate in the new expansion.1

To remedy this while preserving the expansion itself, the Supreme Court limited the federal government's enforcement power. The Court ruled that the Secretary of Health and Human Services may not withhold funds for existing Medicaid beneficiaries from states that refuse to participate in the expansion. By removing the threat of losing all federal Medicaid funding, the Court effectively transformed the expansion from a mandatory requirement into a voluntary choice for the states.1