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Judge says Alaska Medicaid expansion can go ahead Tuesday

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  • Updated: September 28, 2016
  • Published August 28, 2015

A state judge said Friday that Alaska Gov. Bill Walker's administration could expand the Medicaid health care program beginning next week, dismissing a request by the state Legislature to temporarily block enrollment while attorneys argue lawmakers' underlying legal challenge.

The ruling by Judge Frank Pfiffner was a decisive victory for the Walker administration, but it may only be temporary: By the end of the day, the Alaska Supreme Court had already received the Legislature's request for emergency review and ordered Walker's attorneys to respond by Monday at noon.

A ruling before expanded Medicaid enrollment begins Tuesday is "possible," said Stacey Stone, one of the Legislature's attorneys.

But Supreme Court review of the case is optional and, Stone added: "One thing I've learned practicing — the Supreme Court will take due time to consider the issue."

The events Friday were the latest in a battle over Medicaid expansion that's lasted more than six months and now involves all three branches of state government.

Walker, a Republican-turned-independent who ran for governor with the endorsement of the state Democratic Party, made Medicaid expansion one of his campaign promises.

The Republican-controlled Legislature, however, has been skeptical of expansion, which would rely on full federal funding through 2016, with the exception of administrative costs, under provisions of President Barack Obama's health care law.

Walker announced in July he was expanding Medicaid without legislative approval to newly cover about 40,000 low-income Alaskans. That was after state lawmakers rejected expansion during their annual session, citing problems with the state's existing program and potential future costs while Alaska grapples with a budget crisis.

The Legislature last week, in a 10-1 committee vote, authorized spending $450,000 on its lawsuit, with Republican lawmakers saying in a news conference afterward that Walker's unilateral move was illegal. That assertion was based on a state statute that says the Legislature must approve expansion of Medicaid to groups whose coverage is not required under federal law.

After a flurry of motions and briefings this week that saw attorneys working late into the night, Pfiffner heard 75 minutes of oral arguments Thursday. A partial closure of Anchorage courts early next week for Obama's visit to the city forced Pfiffner to issue his ruling Friday.

In his 45-minute opinion delivered from the bench, the Superior Court judge rejected the Legislature's claims that starting expanded Medicaid enrollment Tuesday would be so problematic it should be put on hold while the underlying lawsuit is fully argued.

The Legislature's request, which was technically for a preliminary injunction or temporary restraining order, didn't meet a multipart legal test required for Pfiffner to grant it, he said.

In court filings, attorneys for the Legislature had warned of "massive confusion" and "unjustified reliance interests" that would occur if expansion proceeded Tuesday and was later deemed unlawful.

But the Legislature, Pfiffner said, didn't prove that "irreparable harm" would occur without a court order blocking expansion, because Walker's administration will be spending federal money on Medicaid expansion this year — with the exception of administrative costs covered by the Alaska Mental Health Trust Authority.

"The federal government is picking up 100 percent of the tab," Pfiffner said."It doesn't cost the state one single dime. Not one farthing."

Lawmakers also didn't prove they would be likely to win their basic legal argument: that Walker's unilateral move violated the state law requiring legislative approval for Medicaid coverage of groups whose care isn't federally mandated, Pfiffner said.

Even though the U.S. Supreme Court in 2012 struck down a provision of "Obamacare" penalizing states that didn't expand Medicaid — 19 still hadn't, as of July — expansion is still technically required under the health care law, Pfiffner said, siding with arguments made by Walker's attorneys.

He cited several factors supporting his interpretation, from previous opinions offered by the Legislature's nonpartisan attorneys to the "administrative expertise" of Walker's health commissioner, Valerie Davidson, in asserting that coverage of the Medicaid expansion population is "required."

The Legislature, Pfiffner said, "made no clear showing of probable success on the merits."

"Unless some other court — meaning the Supreme Court — issues some ruling between now and Sept. 1, Medicaid expansion as the governor has said it will happen will indeed happen," Pfiffner said.

In advance of the case before Pfiffner, legislators from the Republican-led majority had publicly argued they were bringing their lawsuit because Walker's decision to expand Medicaid without legislative approval was unconstitutional.

But Pfiffner, in his decision, said it was the Legislature that violated the constitution — in particular, a clause restricting the scope of appropriations bills — by inserting anti-expansion language into this year's state budget.

In the process, Pfiffner said, lawmakers ignored advice from their own legal counsel that the best way to block expansion would be by amending state law to expressly deny coverage.

"The Legislature did not take the bait," said Pfiffner, who was appointed in 2009 by former Republican Gov. Sean Parnell. Instead, he added, "it ineffectually, unconstitutionally amended the appropriations bill to attempt to prohibit what the governor is doing here — and it filed this lawsuit."

Pfiffner's ruling set off a round of hugs for the Walker administration officials in the courtroom, with Davidson, the health commissioner, dispatching a quick celebratory text message to Walker himself: "We won!"

"It's just another great day for Alaskans," Davidson said afterward.

A contingent of staff members for the Legislature's Republican-led majority, meanwhile, quickly left the courthouse. Republican leaders issued a prepared statement later in the afternoon.

"This motion was just one step in the process, and we continue to feel very strongly about our constitutional argument that was presented," the statement quoted House Speaker Mike Chenault, R-Nikiski, as saying. "We are by no means looking for a way to stop Medicaid expansion; we are trying to do it the right way so that we have a reliable, sustainable system."

Walker, in a phone interview, said he was "very pleased" with the decision and would ask to meet with legislative leaders "to talk about going forward."

"My preference is we sit down and work on this, going forward, collaboratively," he said.

A spokeswoman later referred questions about the Legislature's appeal to the Supreme Court to the state attorney general's office.

"We're reviewing it now," Assistant Attorney General Margaret Paton-Walsh wrote in an email Friday evening.

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