Can Maine cut Medicaid? Depends on how broadly you read the Supreme Court ruling

Gov. Paul LePage
Gov. Paul LePage
Posted Aug. 10, 2012, at 4:51 p.m.

AUGUSTA, Maine — As the federal government reviews Maine’s request to make about $20 million in cuts to its Medicaid program, the debate is still brewing over whether Gov. Paul LePage’s administration has the legal authority to make those cuts.

And the side you take largely revolves around one question: How far-reaching is the Supreme Court’s June ruling that largely upheld the Obama administration’s health care reform law?

Not very, for those who think the Medicaid cuts are illegal.

Maine Equal Justice Partners, an organization that provides legal aid to low-income residents, rekindled the debate on Thursday when it sent a letter to U.S. Health and Human Services Secretary Kathleen Sebelius urging her to reject the LePage administration’s request to cut coverage for about 36,000 residents.

At issue is the court decision’s effect on the “maintenance of effort” requirements of the Affordable Care Act, which largely prohibited states from scaling back existing Medicaid services in advance of the law’s 2014 Medicaid expansion.

“We believe the Supreme Court decision had very limited holding, and it was specifically to the enforcement mechanism of the Medicaid expansion,” said Sara Gagne-Holmes, the group’s executive director. “We didn’t believe it impacted maintenance of effort. These cuts would be contrary to the federal law.”

While the Supreme Court in June largely upheld the health care law as constitutional, the court ruled it unconstitutional for the federal government to withhold funds for existing Medicaid services as a way to enforce the Medicaid expansion.

The LePage administration read that part of the ruling more broadly and took it as a sign it could make cuts to its existing Medicaid program through a routine process — an amendment to Maine’s Medicaid State Plan. Attorney General William Schneider said earlier this month that the maintenance of effort requirements are “part and parcel of the Medicaid expansion that was struck down.”

And Thomas Barker, who served as general counsel under Health and Human Services Secretary Michael Leavitt during the Bush administration, told the Bangor Daily News earlier this month that he read the court ruling to more broadly strike down the mechanism the Affordable Care Act planned to use to enforce the Medicaid expansion.

“The maintenance of effort requirements are enforced the same way,” he said. “To me, the Supreme Court has said, ‘You cannot enforce a Medicaid requirement by conditioning 20-27 percent of a state’s budget on compliance with the requirement.’”

But the Obama administration appears to be reading the Supreme Court decision more narrowly as it enforces its health care law. In a letter to governors last month, Sebelius acknowledged the court struck down the requirement that states participate in a Medicaid expansion or risk all of their Medicaid funds. However, she wrote, “[t]he court’s decision did not affect other provisions of the law.”

The Congressional Research Service, the U.S. Congress’ nonpartisan research arm, weighed in later with an opinion similar to Sebelius’, saying that the maintenance of effort provision was “unaffected by the Supreme Court’s ruling.”

The Supreme Court decision makes no mention of the maintenance of effort requirements. And in a few places, “the Court emphasized that its holding was limited to the Medicaid expansion,” said Nicole Huberfeld, a health law expert at the University of Kentucky College of Law.

“It is important to keep in mind that no provision of the [Affordable Care Act] was struck down and no Medicaid Act provision was struck down,” she wrote in an email. “Only the Secretary’s administrative remedy for state noncompliance was limited.”

It’s best to interpret the court’s health care decision narrowly, Huberfeld said, because a plurality of justices — and not a clear majority — ultimately issued the prevailing decision, and there’s historical precedent to interpret “fractured” opinions narrowly.

Supreme Court opinions can be limited in their reach, but it’s also logical to look to the nation’s highest court for broader guidance, said Joseph Reisert, who teaches constitutional law at Colby College in Waterville.

In the case of the health care ruling, Reisert said, it’s the first time the Supreme Court has labeled any sort of conditions on spending federal money “unconstitutionally coercive,” so it’s natural to ask questions about how far-reaching that label is.

“The precise question at issue didn’t actually get resolved, and that’s why you get competing interpretations about what the law means, which are really competing predictions about what the federal courts are ultimately going to decide,” Reisert said.

And it’s possible a federal court will weigh in on Maine’s attempts to scale back its Medicaid program. Schneider, the attorney general, has promised legal action if the federal government doesn’t off on Maine’s request to make its proposed Medicaid cuts.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in Health