Attorney General says Missouri lawmakers can refuse to fund Medicaid expansion

Medicaid Expansion in Missouri

(Missouri Independent) – Missouri lawmakers were not obligated to fund Medicaid expansion, and the courts cannot force the state to pay the medical bills of people who would be eligible under an initiative that amended the state constitution, the state attorney general’s office argued in documents filed Monday in Cole County Circuit Court.

The filing from Attorney General Eric Schmitt’s office is the state’s response to a lawsuit filed May 20 seeking an order that Medicaid rolls be opened to approximately 275,000 working-age adults. 

The lawsuit argues the initiative set eligibility standards, that the legislature appropriated money for all covered Medicaid services and that denying coverage is unconstitutional.

That claim, attorney John Sauer wrote for the state, gives “impermissible credence to an intent the legislature categorically rejected.”

Lawmakers received a request from Gov. Mike Parson for $1.9 billion to cover the costs, including $130 million in general revenue and declined to do so. Because an initiative cannot appropriate existing revenue, Sauer argues, lawmakers were within their power to refuse the spending.

An order requiring the state to provide medical coverage to the expansion group would violate the separation of powers between the judicial and legislative branches, Sauer wrote.

“The legislative branch has exclusive authority over appropriations under the Missouri Constitution,” Sauer wrote.

The case is set for arguments on June 18, and a ruling from Circuit Judge Jon Beetem is expected before the new fiscal year starts on July 1. Before that trial, however, Beetem on Monday will hear a motion from two St. Louis residents to intervene in the case.

Attorneys for the original plaintiffs, three people who would be eligible for coverage under the initiative passed as Amendment 2 in August, could not be reached for comment Tuesday on the new filing.

The intervenors are two people who would also become eligible. Attorney Paul Martin, in their filing, wrote that they should be heard because a ruling against the original plaintiffs “will impair and impede the ability of (the intervenors) to protect their federal and state interests.”

Under the terms of the expansion amendment to the constitution, adults aged 19 to 64 with incomes up to 138 percent of federal poverty “shall be eligible for medical assistance under MO HealthNet and shall receive coverage for the health benefits service package.”

That income level 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 time at $17.58 an hour or two people working a combined 68 hours a week at minimum wage.

Under the current Medicaid program, adults without children are not eligible unless they are blind, have another qualifying disability or are pregnant.

Before the passage of the initiative, Missouri was one of 14 states that had not yet expanded Medicaid under the 2010 Affordable Care Act. The law originally made expansion mandatory but the U.S. Supreme Court ruled in 2012 that penalty provisions that made Medicaid an all-or-nothing program were unenforceable.

Under the terms of the ACA, states pay 10 percent of the cost of expansion and the federal government covers 90 percent. In the traditional Medicaid program, Missouri pays about 35 percent of the cost.

By refusing expansion, Missouri is giving up a chance to receive about $1.2 billion in federal support for the traditional Medicaid program. The American Rescue Plan passed in March increases the federal share of the traditional program by 5 percent for states that expand Medicaid in the next two years.

The lawsuit accuses the state of violating a provision of the expansion amendment that requires the state to maximize federal funding for Medicaid. A promise of additional federal funding to expand Medicaid doesn’t circumvent the power of lawmakers overspending, Sauer wrote.

“The availability of additional federal funds to offset some of the costs of Medicaid expansion alleged in the petition does not make up for the lack of appropriations authority under state law to expend any funds,” he wrote, “whether state or federal, for the purpose of Medicaid expansion.”

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Rudi Keller covers the state budget, energy, and the legislature. He’s spent 22 of his 30 years in journalism covering Missouri government and politics, most recently as the news editor of the Columbia Daily Tribune. Keller has won awards for spot news and investigative reporting.