Judge hears arguments in Medicaid expansion case

JUNEAU — A state court judge in Anchorage heard arguments Thursday in a lawsuit challenging Alaska Gov. Bill Walker’s authority to expand Medicaid without legislative approval.

Superior Court Judge Frank Pfiffner said it was unlikely that he could issue a decision before the end of March.

Any decision he renders can be appealed.

The case was brought by the Legislative Council, which is comprised of state House and Senate lawmakers, all but one of whom belongs to the Republican-led majorities. Supporters of the lawsuit see it as a separation of powers issue.

Some opponents see it as counterproductive and a waste of money.

A key argument in the case centers on whether the expansion population is a mandatory group for coverage under Medicaid or an optional group.

The federal health care law expanded eligibility for Medicaid, and the U.S. Supreme Court in 2012 upheld most of the law.

But it also found that states cannot lose existing Medicaid funding if they don’t expand Medicaid coverage.

The lawsuit contends that Walker overstepped his authority in expanding Medicaid on his own last year. It argues the expansion population is an optional group that cannot be covered unless approved by the Legislature.

The lawsuit is “not some effort to subvert the process. What subverted the process is taking the power away from the Legislature and doing this unilaterally,” said Erin Murphy, an attorney for the council who argued before Pfiffner Thursday.

Assistant state attorney general Dario Borghesan, who argued on Walker’s behalf, said the Medicaid expansion is required.

The U.S. Supreme Court decision did not strike down the provision expanding eligibility but instead limited the federal government’s ability to enforce that requirement, he said.

In expanding Medicaid, Walker followed a process for seeking to spend more in federal or other funds on a budget item than allocated by the Legislature. He acted after legislators tabled expansion — one of his priorities — for further review.

The expanded program launched Sept. 1, and as of the end of 2015, about 8,000 Alaskans had enrolled. The lawsuit seeks to have Medicaid expansion without legislative approval declared unconstitutional.

It’s unclear how things would play out should the Legislative Council prevail.

“It would probably stress those who have already signed up, that is for sure,” said Senate Majority Leader John Coghill, R-North Pole, a leading voice in support of the council suit. He thinks legislators would have to have a vote on expansion and that it would force a conversation on next steps.

“I think there are many people in the Legislature that would go along with the Medicaid expansion as long as we had the reforms,” Coghill said Wednesday.

Legislators already have begun hearings on bills aimed at curbing and containing Medicaid costs. Medicaid reform is one of the stated priorities of the Senate majority.

Rep. Sam Kito III, D-Juneau, a council member who voted against the lawsuit, said Wednesday that he thinks it is “all about making a statement rather than doing the right thing for the state of Alaska.” Medicaid expansion is a positive, Kito said.

Lawsuits have been filed in at least two other states over expansion.

In Ohio, expansion was upheld. Litigation is still pending in Arizona.

The legislative session is scheduled to end April 17.

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