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Alaska Supreme Court allows Medicaid expansion to take effect Tuesday

  • Author: Tegan Hanlon
  • Updated: September 28, 2016
  • Published August 31, 2015

Medicaid expansion will start in Alaska Tuesday after the Alaska Supreme Court said it would not block enrollment in the broadened health care program.

The court's order Monday marks a victory for Gov. Bill Walker in an ongoing lawsuit between his administration and the state Legislature over the legality of expanding Medicaid without legislative approval.

"The Alaska Supreme Court's ruling today brings final assurance that thousands of working Alaskans will have access to health care tomorrow," said Walker in a prepared statement Monday. "Medicaid expansion will save the state more than $100 million in its first six years, and save Alaskan lives."

While the Supreme Court denied the Legislature's motion for a temporary restraining order, which would have temporarily stopped enrollment in expanded Medicaid, the underlying lawsuit pitting the Legislature against the Walker administration still stands.

The Legislative Council, on behalf of the Legislature, sued Walker's administration in mid-August in efforts to stop him from unilaterally expanding the health care program under the Affordable Care Act. They framed their decision, to challenge Walker, as a constitutional one. They said they needed more time to examine expansion because of the risk of future costs. The Republican-controlled House-Senate committee voted 10-1 to spend up to $450,000 on the lawsuit.

In court, attorneys for the Legislature argued that it would be problematic to start expanded Medicaid enrollment Tuesday while attorneys continued to handle the underlying lawsuit. They asked for the court to put a hold on enrollment. But, Superior Court Judge Frank Pfiffner ruled Friday that Walker's administration could go forward with expansion this week.

The Legislature's attorneys quickly filed a petition with the Alaska Supreme Court and argued that Walker acted unlawfully when he expanded Medicaid without lawmakers' approval. He violated the state law requiring legislative approval for Medicaid coverage of groups whose care isn't federally mandated, the petition said.

"Accordingly, this Court should stop the Governor from putting his unlawful and unconstitutional plan into action before it causes immediate and irreparable injury to the Legislature and the people of Alaska," the Legislature's petition said.

Attorneys for Walker's administration answered the Legislature's petition Monday, arguing that the Legislature had defied the normal process for appealing the lower court's decision. They argued that there would be no emergency if Medicaid expansion began Tuesday.

"All that will happen on that date is that some additional low-income Alaskans will get federally funded health care coverage," the response said. "If a court later concludes in two weeks or two months that Medicaid expansion is unlawful, the coverage will stop. The only 'harm' that will occur in the interim is no harm at all."

Ultimately, the Supreme Court order issued Monday said the Legislative Council failed to show that the Superior Court erred in denying the preliminary injunction. It said Walker's administration could move forward with enrolling Alaskans in expanded Medicaid Tuesday.

Stacey Stone, one of the Legislature's attorneys, said the underlying lawsuit will continue in Superior Court. She said soon after the Supreme Court issued its order that she still had to talk to her clients about their response.

"My only comment is that it was a rushed request and this will enable us to give the court more time to let both sides brief this issue," she said.

A statement from the Alaska Department of Law, sent by Cori Mills, assistant attorney general, said that they were "pleased" with the Supreme Court's decision.

"Ultimately, the Legislative Council could not show any real harm from allowing the program to move forward, and the Court upheld the well-reasoned decision of Judge Pfiffner," the statement said. "Hopefully, this convinces the Legislative Council that resources would be better spent working together towards the common goal of reform, instead of spending money on lawsuits."

Alaska joins 30 other states and the District of Columbia in expanding Medicaid, or planning to, according to the Kaiser Family Foundation. Walker, a Republican-turned-independent, made Medicaid expansion one of his key campaign promises.

Without expansion, low-income Alaskans covered by Medicaid included parents, children, pregnant women and individuals in foster care up to age 26 -- leaving out childless adults. Medicaid expansion opens up access to Alaskans who earn up to 138 percent of the poverty level, or an annual salary of roughly $20,000 for a single adult -- including childless adults.

Rep. Bill Stoltze, R-Chugiak, said what disappointed him most about Walker's decision to expand Medicaid was that he violated public process. He also said he wanted more financial vetting of expansion.

"The really important process is the public process and we don't really have that in the way this was handled," he said. "It's really hard to remove benefits once people get them, so I think that's why the governor wanted to hurry up."

Stoltze noted that Medicaid expansion's effective date comes a day after President Barack Obama landed in Anchorage for a three-day tour of the state. Gov. Bill Walker rode on Air Force One with Obama from Washington, D.C., to Anchorage Monday.

"I bet you there was a high-five on Air Force One," Stoltze said.

Rep. Andy Josephson, D-Anchorage, who has filed legislation to expand Medicaid in the past, said that expansion is not only good for Alaskans' welfare, but will also have economic benefits.

The big question, he said, is, "What will the Legislative Council do now? My hope is they will say, 'We gave this a try and we're done with this.' There are other important things for the Legislature to look at. This isn't one of them at this point."

In preparation for an influx of Medicaid applications Tuesday, Sarana Schell, a public information officer for the Alaska Department of Health and Social Services, said the state had starting filling 21 new long-term, yet temporary, staff positions with the state's Division of Public Assistance.

"Most have been hired already," she said in an email. "We also secured authorization to pay overtime for Public Assistance staff."

Schell said the health department expects about 20,000 Alaskans to apply for Medicaid in the first year. By some estimates, Medicaid expansion could cover up to 40,000 additional low-income Alaskans.

The Alaska Mental Health Trust Authority has pledged nearly $1.6 million to cover administrative costs for the first year of expansion, matching federal dollars that will go toward enrollment efforts, Schell said.

Under the Affordable Care Act, the costs of Medicaid expansion are paid entirely by the federal government through 2016 before scaling back to 90 percent by 2020.

Schell said it was difficult to guess how long it would take for new applications to process, but said 30 days was the department's goal. She said the state's Medicaid payment system, that had a botched rollout by Xerox State Healthcare LLC, needed a few more fixes and most of those were scheduled over the next two months.

She said, at this point, more than 90 percent of the state's Medicaid claims processed correctly the first time.

"That's an average of 130,000 claims resulting in payment of $29 million a week," she said in an email.

The federal government and the state jointly fund Medicaid. Schell said Alaskans between ages of 19 and 64 who meet income qualifications can apply for Medicaid at the Public Assistance Office or online, through healthcare.gov or the state website.

As the lawsuit continues in Superior Court, Schell said that if at some point the state must stop Medicaid expansion, the health department would "do what we do with all changes to our program."

"We would make the necessary system changes, and we would provide participants with as much advance notice as possible and give them information about other programs, both state and federal, for which they might be eligible," she said.

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