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Sen. Coghill: Walker must explain why unilateral Medicaid expansion doesn't violate Alaska law

  • Author: Sen. Coghill
  • Updated: June 29, 2016
  • Published July 30, 2015

On July 16, despite low projected oil prices, an ongoing budget crisis, and warnings across the country about cost issues associated with Medicaid expansion, Gov. Bill Walker announced his intent to unilaterally expand Medicaid in Alaska. The decision is fraught with risk. Much of the time spent since the announcement has been focused on "process" associated with the Legislative Budget and Audit Committee, but other substantive issues remain.

Medicaid, a state/federal entitlement program, is already one of the largest cost drivers in the state. Walker's credibility on "state cost containment" and a "sustainable budget" has been damaged. Many Alaskans may be increasingly skeptical of his attempts to raise revenue, (when the executive branch demonstrates that it simply can't help itself).

He also wrote an opinion piece. Legal opinions were circulated and used as justification (although one wonders if the correct questions were being asked). In the midst of swirling legal opinions, one glaring issue emerged:

Can Walker, under state law, unilaterally expand Medicaid to include additional, optional "eligible persons" without approval by the Legislature?

To many, the answer is no. Pursuant to AS 47.07.020(d), additional, optional groups eligible for Medicaid coverage expressly require legislative approval.

Let's go through the analysis step-by-step.

First, let's start with AS 47.07.020. Generally, that state statute defines who is eligible to receive Medicaid coverage.

AS 47.07.020(a) says this:

All residents of the state for whom the Social Security Act requires Medicaid coverage are eligible to receive medical assistance under 42 U.S.C. 1396-1396p (Title XIX, Social Security Act).

The key word there is "requires."

Remember: Although the Affordable Care Act mandated coverage to newly eligible individuals (up to 138 percent of the federal poverty level, or FPL), coverage was not "required" for the expanded population after the U.S. Supreme Court decision, National Federation of Independent Business v. Sebelius, 132 S.Ct. 2566, 2574-75 (2012). The court specifically stated that "states would have a genuine choice whether to participate in the Medicaid expansion." See Sebelius, 132 S.Ct. at 2575.

A "genuine choice." Medicaid expansion is not required. It's optional. In other words: Coverage for the expanded population is an optional choice by each state.

So we have an "optional 138-percent group" or "optional expansion group." Regardless of what it is called, the group may be included in our statute, but it has to go through a specific, lawful process.

For background, people should be reminded that Alaska currently has a list of optional groups already covered. The list is in AS 47.07.020(b), and covers fifteen optional groups. Examples include:

1. “[P]ersons in a medical or intermediate care facility whose income while in the facility does not exceed 300 percent of the supplemental security income benefit under 42 U.S.C. 1381-1383c (Title XVI, Social Security Act) but who would not be eligible for an optional state supplementary payment if they left the hospital or other facility.”

2. “[P]ersons under 19 years of age who are not covered under (a) of this section and whose household income does not exceed 175 percent of the federal poverty line as defined by the United States Department of Health and Human Services and revised under 42 U.S.C. 9902(2).”

3. “[P]regnant women who are not covered under (a) of this section and whose household income does not exceed 175 percent of the federal poverty line as defined by the United States Department of Health and Human Services and revised under 42 U.S.C. 9902(2).”

Unfortunately for Walker, to add an "additional group," you have to get legislative approval. That provision is found in AS.47.07.020(d).

AS 47.07.020(d) plainly states: "Additional groups may not be added unless approved by the legislature."

In other words: Whether Walker likes it or not, the law requires legislative approval if the state is to expand Medicaid coverage up to 138 percent of the federal poverty line. The "optional 138-percent group" or "optional expansion group" is an additional group that requires legislative approval under AS.47.07.020(d), to be added to the list found in AS 47.07.020(b).

I think the governor's office likely knew that legislative approval was required. Look at House Bill 148 during the 2015 session. Specifically look at Committee Substitute for HB 148 (HSS) ("CS for HB 148(HSS)"). The drafting number is 29-GH1055\H. Go to page nine, starting at line 11 through 17. Noteworthy: the language is also found in the original HB148 (drafting number 29-GH1055\A) at page 6, lines 26-31, and page 7, line 1.

The governor's staff, aware of AS 47.07.020(d), attempted to insert a "sixteenth group" to the "optional group list" in AS 47.07.020(b):

(16) person who are under 65 years of age, who are not pregnant, whose household income does not exceed 138 percent of the federal poverty line, including the five percent income disregard, as defined by the United States Department of Health and Human Services and revised under 42 U.S.C. 9902(2), and who are eligible under 42 U.S.C. 1396a(a)(10)(A)(i)(VIII), if the federal medical assistance percentage paid to the state for the coverage is not less than 90 percent.

To many, this insertion essentially admits that the executive branch knew it didn't have authority for unilateral expansion, so it tried to include the provision for legislative approval. This attempted process, through HB 148, was actually the correct, and lawful pathway.

The governor chose a different path on July 16. He'll have to live with the repercussions.

Here's the bottom line: The governor is trying to violate statute in order to foist an expensive entitlement program on Alaska. This unilateral decision exposes legal and financial weaknesses. Troublingly, the evidence is mounting that the state is ill-equipped to afford the "collateral consequences" (especially when one considers our reasonable projected financial circumstances for the next few years).

In light of the Supreme Court's ruling in Sebelius, the plain language of 47.07.020 (a), (b), and (d), and the attempted process in House Bill 148, the governor should be required to explain why his chosen procedure doesn't violate substantive state law.

Sen. John Coghill, R-North Pole, represents District B in the Alaska Senate. He is majority leader, vice-chair of the Senate Judiciary Committee and member of the Senate Health and Social Services Finance Subcommittee. He is also a member of the Alaska Health Care Commission.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com.

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