As part of Obamacare's efforts to expand access to healthcare, it included an expansion of Medicaid. Medicaid is a program that receives some federal funding, but it's administered by the individual states. The law said that if a state decided not to participate in the Medicaid expansion, then they would lose their existing Medicaid funding. The Supreme Court, when it ruled on the constitutionality of Obamacare, said that the individual mandate was constitutional, but then said that the provision that would have removed existing Medicaid funding from states that didn't participate in the expansion was unconstitutional, because it was the federal government engaging in coercion against the states.

I don't understand the reasoning here. Suppose I, as a private citizen, have been voluntarily donating money to the state government of New Jersey every year for the past few years, and then I tell the state government that I'll stop donating money unless they enact some policy that I want. Would that constitute illegal coercion? I don't think so.

And I'm pretty sure that if I've been donating money to a private charity every year for the past few years, I can suddenly say that my future donations will be contingent on the charity doing X, Y, and Z.

Just to take one more example, if the federal government itself has been funding some scientist's research for the past few years, it can suddenly decide to place a new requirement that he has to comply with new guidelines if he wants to continue receiving funding.

So why is it that if the federal government has been giving money to a state for the past few years, it can't say that the state has to take some action if it wants to continue receiving funding? Why is that, and that alone, considered unconstitutional coercion?