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Missouri Supreme Court Rules Voter-Approved Medicaid Expansion is Constitutional Unanimous decision will make 275,000 Missourians eligible for health care coverage

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6 minute read

Missouri must expand Medicaid to 275,000 eligible people who were expecting coverage under a constitutional amendment that took effect July 1, the Missouri Supreme Court ruled Thursday.

In an unanimous opinion, the court overturned a trial court ruling that the amendment, passed in August 2020, was unconstitutional because it may increase the state’s cost for the Medicaid program. 

By funding the services required under federal law, the state must allow everyone eligible to access those services, the court wrote.

“With no ambiguity, the amounts appropriated and other extrinsic evidence cannot be used to alter the plain language of the purposes stated – to fund MO HealthNet without distinguishing between benefits provided to individuals who are eligible as part of the pre-expansion population and those eligible only under” the expansion amendment, the court wrote.

The ruling “is about as concise of a win as you could imagine for the people of the state of Missouri,” said Senate Minority Leader John Rizzo, D-Independence.

Senate Appropriations Committee Chairman Dan Hegeman, R-Cosby, called the ruling disappointing and said in a prepared statement that he supported the original decision.

“By differentiating between an ‘appropriation’ and an ‘expenditure,’ the Supreme Court is playing political games when common sense says they are both taxpayer dollars,” Hegeman said. “The legal gymnastics employed by the court to get their desired political outcome sets a dangerous precedent and greatly diminishes the power of Missourians’ elected representatives.”

House Budget Committee Chairman Cody Smith, R-Carthage, declined to comment on the ruling. Smith opposed spending the $1.9 billion in state and federal funds requested by Gov. Mike Parson in January to fund the expansion.

“I’ve got to understand the decision first,” Smith said.

Attorney Chuck Hatfield argues in favor of Medicaid expansion July 13 before the Missouri Supreme Court.
Attorney Chuck Hatfield argues in favor of Medicaid expansion July 13 before the Missouri Supreme Court. (Photo taken from pool video provided by KMIZ-TV)

The ruling is the strongest possible decision and should silence opponents of Medicaid expansion, said Chuck Hatfield, who argued the case for the plaintiffs seeking coverage.

“The thing I am most pleased about is that this is a 7-0 decision,” Hatfield said. “Every judge up there, whether they are a Democratic appointee or a Republican appointee, agreed. I think it was important that we have all seven of them there.”

Attorney General Eric Schmitt’s office declined comment.

The ruling echoes what supporters said during debate over this year’s budget.

Senate Majority Leader Caleb Rowden, one of the few Republicans who voted to appropriate funds for Medicaid expansion, predicted Thursday’s result in May.

At that time, Rowden, R-Columbia, said he expected the courts to tell the state to provide coverage like it does for every other eligibility category.

“I believe the court will do that,” Rowden said. “And when they do, folks in the expansion threshold will be allowed to apply and we will be presented with a very, very large supplemental budget in October, or November, or December.”

Hatfield quoted Rowden during arguments before the Supreme Court.

“He told them on the floor how this was going to go down and he was absolutely right,” Hatfield said Thursday.

The Missouri Supreme Court hears arguments over Medicaid expansion on July 13, 2021
The Missouri Supreme Court hears arguments over Medicaid expansion on July 13, 2021. (Screenshot from pool video provided by KMIZ-TV)

The ruling came nine days after the court heard oral arguments on an expedited schedule. In the decision, the court ordered Cole County Circuit Judge John Beetem to issue a new ruling in favor of the plaintiffs who sued to receive coverage.

Hatfield said he will be working with Schmitt’s office on the final order that will be issued by Beetem.

“We want to get this implemented as quickly and as smoothly as possible,” Hatfield said. “We should be able to flip that switch on very quickly.”

Under the terms of the Medicaid expansion initiative, adults aged 19 to 64 are eligible if their household incomes are 138% 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 time at $17.58 an hour or two people working a combined 68 hours a week at minimum wage.

Prior to Thursday’s ruling, no adult without children was eligible for Medicaid in Missouri unless they have a qualifying condition such as a disability. Adults with children were eligible if their household income is less than about 16 percent of the federal poverty guideline.

Nina Canaleo, 38, who earns about $14,000 a year working part-time cleaning a grocery store at night, said she was trying to figure out if she was in a dream when she heard the news of Thursday’s ruling. She couldn’t believe it.

“Wow,” Canaleo said. “I’m very happy, that’s what I am.”

Canaleo pays steep bills to treat her multiple sclerosis, a chronic nerve disease that is often accompanied by dizziness and numb feet. She purchased health insurance this year after a fundraiser helped her cover the costs of a plan under the Affordable Care Act. 

She was worried what would come next once the funds finally ran out. Now, she feels relieved.

“I’m gonna be able to take care of myself next year without having to have a fundraiser,” Canaleo said, later adding: “Now I don’t have to worry about that.”

During arguments before Beetem and again before the high court, John Sauer of the Attorney General’s office urged the courts to go beyond the dollar amounts for particular services included in the appropriation bills that pay for Medicaid.

Sauer argued that the ratio of state funds to federal funds is important because it showed the intent of lawmakers to only fund services for the traditional Medicaid population.

Missouri taxpayers cover about 35% 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% of the cost.

He also asked the court to take notice of statements made by lawmakers during debate and votes against adding the funds requested by Parson.

The opinion, which was not attributed to any individual judge, stated that the ratio of funding is irrelevant to the question of whether a particular service is funded.

Judge Jon Beetem
Judge Jon Beetem is shown at the bench during Monday’s hearing in his Cole County courtroom. Litigants representing both sides in the hearing made their presentations regarding Medicaid funding before Beetem in an afternoon hearing that was rescheduled from Friday. (Julie Smith | News Tribune)

“Clearly, the bills fund services to all who are eligible for (Medicaid), and they do not purport to exclude those eligible only pursuant to” the expansion amendment, the opinion stated.

The trial court’s ruling was faulty, the Supreme Court stated, because it incorrectly interpreted a constitutional limit on initiatives barring petitions that appropriate state funds.

That constitutional provision “prohibits is an initiative that authorizes the expenditure and disbursement of a specified amount for a specified purpose without providing new revenue,” the court ruled. “This includes an initiative that deprives the General Assembly of discretion and requires it to appropriate money for the initiative’s purposes.”

But lawmakers retain discretion over how much money to spend on Medicaid, the court wrote. 

Prior to expansion, Medicaid was expected to cost about $12 billion in state and federal funds in the current fiscal year. 

“The General Assembly maintains the discretion to decide whether and to what extent it will appropriate money for (Medicaid) programs,” the opinion stated. “Even though it is highly possible the General Assembly appropriated less money than MO HealthNet programs are estimated to cost in FY 2022, the consequences of failing to fund MO HealthNet fully at the outset or even with a supplemental appropriation are not before this court because they are not relevant…”

Groups that backed Amendment 2 praised the court’s decision as a boon to the state’s economy and for the goal of a healthier state.

“It is hard to overstate the positive impact this decision will have on economic growth across the state of Missouri,” Jason Hall, CEO of Greater St. Louis, Inc., said in a prepared statement. “The state is expected to see a substantial increase of new high-quality jobs. More hard-working families will have access to health care. Our health care sector will be able to expand and hire more people in more places.”

It will mean earlier diagnoses for dangerous illnesses, health care advocates said.

“This ruling is a victory in the fight against cancer in Missouri,” said Emily Kalmer, director of government relations for the American Cancer Society Cancer Action Network. “We know individuals without health insurance are more likely to be diagnosed with cancer at later, more costly stages and are less likely to survive.”

The extra cost of expansion is expected to be more than offset by additional funding available to the state under the American Rescue Plan, the COVID-19 relief bill Congress approved in March.

States that have not expanded Medicaid will receive incentive to do so by cutting the state’s share of the existing program by 5%. That change is worth about $1.15 billion to Missouri over the next two years.

“As a result of the Supreme Court’s ruling, Missourians across the state will finally be able to realize the health and economic benefits of Medicaid expansion,” said Amy Blouin, president and CEO of the Missouri Budget Project. “State after state has shown that in addition to providing insurance to those eligible, expansion is a fiscal and economic boon to state economies and budgets.”

Rudi Keller covers the state budget, energy and the legislature in Missouri. This story first appeared on the Missouri Independent, a nonpartisan, nonprofit news organization covering state government, politics and policy.

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