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Missouri Supreme Court says Medicaid expansion is constitutional

Ruling vacates, remands lower-court ruling
Posted at 1:23 PM, Jul 22, 2021
and last updated 2021-07-22 18:31:08-04

KANSAS CITY, Mo. — The Missouri Supreme Court unanimously ruled Thursday that the voter-led effort to expand Medicaid is constitutional under state law.

The ruling overturned Cole County Circuit Court Judge Jon Beetem'sdecision last month in which he ruled that Medicaid expansion was unconstitutional because Amendment 2, whichvoters approved last August, did not explicitly articulate a funding source.

However, the state Supreme Court ruled that, because the amendment "does not expressly appropriate money for MO HealthNet nor deprive the General Assembly of discretion and require it to appropriate money for its purposes, it does
not violate" the state constitution, the Missouri Supreme Court ruled Thursday.

Despite the ruling, a spokesperson for Parson's office said in a statement that the executive branch "still lacks the necessary budget authority to implement MO HealthNet coverage to the expanded population. We are looking at what options may be available to us to seek additional budget authority and also pursuing legal clarity."

The issue came to a head when the Missouri legislature refused to appropriate additional funds to MO HealthNet, which is the state's Medicaid program, for the expanded population in the 2021-22 fiscal year budget.

RELATED | In-depth: Why the courts must resolve Missouri’s Medicaid fight

Gov. Mike Parson touched off protests in May when he announced that he wouldnot allow those eligible under Amendment 2 to sign up for MO HealthNet because of the legislature's refusal to fund the expansion.

Parson’s refusal to direct the Missouri Department of Social Services to sign up residents under Amendment 2 prompted a lawsuit by three Missouri residents who would be newly eligible under the law, which was supposed to take effect July 1.

“Today’s unanimous Missouri Supreme Court decision is a complete vindication for those who have worked to expand health care access and a thorough rejection of those willing to defy Missouri voters and ignore the rule of law to stop it from happening.” Missouri House Minority Leader Crystal Quade, a Springfield Democrat, said in a statement. “We expect the trial judge will follow the Supreme Court’s clear direction and promptly order the state to begin providing Medicaid services to the expanded population as mandated by the Missouri Constitution.”

Amendment 2 expanded income guidelines for Medicaid eligibility to 138% of the federal poverty guidelines or 133% for individuals 65 years and older, which will add up to 275,000 Missourians to MO HealthNet’s rolls.

Under provisions of the Affordable Care Act, the federal government will reimburse states that expand Medicaid 90% of the health care costs for that portion of the population.

The ruling does not require the state legislature to appropriate any money.

Instead, it paves the way to direct Parson and the Department of Social Services to allow those constitutionally eligible for MO HealthNet to sign up.

Sen. Mike Cierpiot, a Lee’s Summit Republican, told KSHB 41 in June that the federal government will increase Medicaid payments to Missouri by $50 million per month for the next two years when MO HealthNet begins signing up newly eligible recipients.

“That money may be enough to cover the new eligibility, so we may never run out of money anyway,” he said. “But if we do, and we often do in budget years, we can do a supplemental budget. We do it many times when pharmacy costs are more than we anticipated or some other component, so that’s not that unusual to have a supplemental budget.”

There is no separate funding for the existing and new Medicaid populations in Missouri, so the money will simply be used to fund MO HealthNet.

“All this money comes out of the same Medicaid pot,” Cierpiot said. “It’s not like there’s some for nursing homes, some for hospitals, some for this new eligibility. It’s all the same pot. And they will start paying bills. Later this year, we will either run out of money and do a supplemental or not.”

Before expansion, nearly one in six Missouri residents — 14.4% — qualified for Medicaid in 2019, according to a study by the Kaiser Family Foundation.

The Missouri Supreme Court agreed to hear the case late last month after plaintiffs appealed Beetem’s ruling.

The decision Thursday sends the case back to Cole County Circuit Court for reconsideration in light of the Missouri Supreme Court’s guidance that Beetem erred in declaring Amendment 2 unconstitutional.

Supporters of Medicaid expansion lauded the court’s ruling — including Missouri Budget Project President and CEO Amy Blouin, who called expansion “a fiscal and economic boon” in a statement.

The Healthcare for Missouri coalition also celebrated the ruling.

“We look forward to seeing Medicaid expansion swiftly implemented by the State so that all eligible Missourians receive the access to health care they need,” the group said in a statement. “This is not a partisan issue or a political issue — it’s a people issue. The real winners of this legal battle are the people of this state whose livelihoods are dependent on access to health care.”

Lawyers for the state argued in a July 13 hearing that Medicaid expansion violated Article III, Section 51 of the Missouri Constitution, which forbids “the appropriation of money other than of new revenues created and provided for” through the state’s initiative petition process.

Attorney Chuck Hatfield, who represents several Missouri residents who sued the state for the right to enroll in MO HealthNet, countered that nothing in the state appropriation bill prevents anyone eligible from signing up — and that failure to enroll his clients and others now eligible violated Article VI, Section 36(c) of the Missouri Constitution, which was created by Amendment 2.

Parson had to call a special session in late June to force legislators back to Jefferson City for renewal of the federal reimbursement allowance, or FRA, which is the state’s funding mechanism to draw down federal Medicaid dollars.