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Judge to rule this week on Missouri Medicaid expansion lawsuit

A decision on whether Missouri must provide Medicaid coverage to working-age adults will come in “a day or so,” Cole County Circuit Judge Jon Beetem said Monday at the end of a trial that will help decide if 275,000 Missourians will become eligible for health care benefits.

“I am sensitive to the time,” Beetem said, referring to the July 1 start date for benefits mandated by an initiative passed by voters in August 2020.

During the hearing that lasted a little more than an hour, attorney Chuck Hatfield tried to convince Beetem that the budget for the coming fiscal year makes no distinction among various eligibility criteria when funding services provided by Medicaid. That means the state must provide coverage if it continues to operate a Medicaid program, Hatfield said.

“If you are going to fund Medicaid, it now includes the population that is specified in the constitution,” Hatfield said.

John Sauer, representing the state on behalf of Attorney General Eric Schmitt’s office, told Beetem that nothing in the appropriation bills for the coming year directs the state to allow the benefits, and the legislative history of their enactment shows lawmakers decided against opening the rolls.

If lawmakers had intended to fund Medicaid expansion, Sauer told Beetem, it would be clear in the spending bills.

“It is a huge deal,” Sauer said. “It is a policy decision of enormous import.”

Under the terms of Amendment 2, adults aged 19 to 64 would become eligible for Medicaid if their household incomes are 138 percent of the federal poverty guideline or less. That is $17,774 a year for a single person, equal to working about 33 hours a week at the state minimum wage of $10.30 per hour. For a household of four, the limit is $36,570, the income of one person working full at $17.58 an hour or two people working a combined 68 hours a week at minimum wage.

Under the current Medicaid system, no adult without children is eligible unless they have a qualifying condition such as a disability. Adults with children are eligible if their household income is less than about 16 percent of the federal poverty guideline.

Missouri taxpayers cover about 35 percent of the costs for the traditional Medicaid system. The expansion group would receive coverage under the terms of the Affordable Care Act, which requires states to pay only 10 percent of the cost.

Amendment 2 directed the state to start coverage July 1 and take all the preliminary steps necessary to provide benefits on that date. When lawmakers refused to appropriate the $1.9 billion, including $130 million in general revenue, sought by Gov. Mike Parson to pay for the coverage, the state withdrew a plan amendment submitted earlier this year to federal regulators.

Hatfield and attorney Lowell Pearson represent three people who would have been eligible on July 1. They are asking Beetem to find their clients are eligible and order the state to provide the coverage during the inevitable appeal.

While the case is likely to ultimately go to the Missouri Supreme Court, Hatfield said after the hearing that he expects the case will go first to the Western District Court of Appeals.

As he sought to convince Beetem, Hatfield argued that all he needed to do is consider whether the legislature funded Medicaid services at all in the coming year and the laws governing eligibility.

That, in context of a Missouri Supreme Court decision from last year ruling that lawmakers could not use appropriation bills to bar Planned Parenthood from providing medical services to Medicaid clients, will decide the case, Hatfield said.

“I don’t think the court has much work to do to understand what the law is,” Hatfield said.

The high court’s Planned Parenthood decision showed that the only legal appropriations are those that set a dollar amount and a purpose. Anything else must be addressed in a statute or a constitutional amendment, Hatfield said.

Sauer was trying to convince Beetem that lawmakers could change Medicaid eligibility through appropriation bills, Hatfield said.

“That is basically the state’s argument, that the appropriations bill amended the constitution and denies our clients the eligibility the constitution guarantees to them.”

Sauer called Hatfield’s arguments “misleadingly simple.”

A “reasonable person” who had a good grounding in Medicaid and how it is funded can see lawmakers did not approve expansion, Sauer said. The appropriations are all based on the traditional Medicaid match rates, he said. 

Also, while setting appropriations for Medicaid is never an exact process, the enormous gap between the money allocated for the coming year and the program’s cost with the expansion group shows lawmakers did not intend to fund it, he said.

“There is no logical inconsistency,” Sauer said, “because funding and eligibility are not the same thing.”

This article by Rudi Keller is published by permission of The Missouri Independent.

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