Legislature's Medicaid expansion lawsuit inches forward

A lawsuit to halt Gov. Bill Walker's Medicaid expansion inched forward Thursday morning as both sides made their cases in Superior Court, with the judge telling them not to expect a decision until the end of March.

Each side was given 45 minutes to make their case. While both sides made a variety of arguments, they also agreed with Judge Frank Pfiffner that the case centers on the definition of one word in the state Medicaid statute: "requires."

The law in question says, "All residents of the state for whom the Social Security Act requires Medicaid coverage are eligible to receive medical assistance."

In 2010, President Barack Obama's health care legislation, the Affordable Care Act, became law. Among the provisions was the requirement of an expansion of Medicaid to childless adults. That requirement was struck down by the U.S. Supreme Court in 2012.

Assistant Attorney General Dario Borghesan, speaking on behalf of defendants Walker and Alaska Health and Social Services Commissioner Valerie Davison, argued the Supreme Court ruling did not change the text of the federal law. Since Alaska law follows federal text, the governor interpreted the statute as reading that the expansion group is required, he said.

In its ruling, the Supreme Court barred the federal health department from applying financial penalties — essentially taking away it's stick to enforce Medicaid expansion. The state argues that there is a distinction between a lack of penalties and a lack of requirement in law.

The Legislative Council disagreed. "The reality is you have to analyze that under the basis of the (Supreme Court's) decision," said state Senate majority legal counsel Chad Hutchison after the hearing. The U.S. Supreme Court found the expansion unconstitutionally coercive of states, and thus was not required.


The Legislative Council also argued that Walker acted outside of the powers of the executive branch when he enacted unilateral expansion.

Borghesan said after the hearing the Legislative Council was inappropriately trying to describe the situation as "power grab" by Walker.

"It's the executive branch's job to carry out the laws, and to do that we have to interpret the statute," Borghesan said after the hearing. "The governor is just carrying out what he believes the Alaska law says."

The Legislative Council, on behalf of the Legislature, sued Walker's administration in mid-August to stop him from unilaterally expanding the health care program under the ACA.

Medicaid expansion took effect Aug. 31, opening the program to childless adults whose income falls beneath 138 percent of the federal poverty level, or an annual salary of about $20,000.

Judge Pfiffner asked Legislative Council attorney Erin Murphy why he shouldn't "slow-roll" his decision to allow for a possible resolution of the matter in the Legislature, citing two Medicaid reform bills currently in the Senate. The Legislature could also decide the entire issue in a vote, and if legislators would "stand up and be counted," voters will know their positions, Pfiffner said.

"I don't know if we agreed 100 percent with that particular statement … that being said we still have (the two bills) and we're looking at reforms," Hutchison said.

Pfiffner also noted during the hearing that the Legislature could create a definition of the word "requires," which could resolve the issue.

"In theory the legislative branch could attempt to pass something like that but that wouldn't solve the question … can the executive branch unilaterally act on its own?" Hutchison said.

Pfiffner noted that there was little chance the lawsuit would be resolved by the scheduled end of the legislative session in April given a likely appeal. He called himself a "speed bump" along the way to the Alaska Supreme Court by the losing party.

After listening to both sides and asking questions of the parties, Pfiffner told the courtroom he would issue a "lengthy written decision," which would likely not be completed before the end of March.

Laurel Andrews

Laurel Andrews was a reporter for the Anchorage Daily News, Alaska Dispatch News and Alaska Dispatch. She left the ADN in October 2018.