Legal opinions say Alaska lawmakers' effort to stop Medicaid expansion likely unconstitutional

June 08--JUNEAU -- Attempts by legislative leaders to use the budget to stop Gov. Bill Walker from accepting federal Medicaid expansion are likely unconstitutional and can't block unilateral action by Walker to bring the program to the state with or without the Legislature's agreement, new legal opinions say.

The Alaska Legislature has refused to consider an up-or-down vote on expansion bills unless it already has Republican-majority support. The Republican-led majorities stripped savings from the budget submitted by Gov. Bill Walker that would come from expanding Medicaid.

Walker is an expansion advocate, saying the program would bring health care coverage to 20,000 or more lower-income Alaskans and would be paid for almost entirely by the federal government. As a side effect, it would bring millions of dollars from the federal treasury to Alaska, save hospitals and clinics from large, unpaid bills, and cover more of the cost of treating prisoners.

Opponents say it would tie Alaska to "Obamacare" -- the Affordable Care Act -- and might commit the state to keeping the program even if the federal government cuts back on reimbursements.

The Legislature's actions against Medicaid expansion, part of President Obama's efforts to bring health care coverage to every American, comes despite publicly available polls, including one commissioned by expansion opponents, showing strong support for expansion.

To block Walker, the Legislature included provisions in the operating budget aimed at preventing him from acting unilaterally to take the $130 million in federal money for the program.

But two legal opinions, one from the Alaska Department of Law, which serves as Walker's attorney, and one from the Legislature's own attorney, have concluded that language is "likely unconstitutional" and can't be enforced.

Medicaid expansion was one of Walker's top campaign priorities. His point person on expansion is Valerie Davidson, commissioner of the Department of Health and Social Services, the state agency that administers Medicaid in Alaska.

Davidson said Medicaid expansion is still a top priority for the Walker administration, even if it has recently taken a back seat to attempts to get a funded budget passed by the Legislature before the beginning of the fiscal year on July 1.

"The governor and I continue to hope that the Legislature will address Medicaid reform and expansion during special session," Davidson said.

Key Republican leaders on the Medicaid expansion issue did not respond to interview requests last week.

Davidson did not say if Walker would expand Medicaid on his own, while acknowledging the legal opinions saying that the legislative prohibitions on his doing so are invalid.

"I think we're not there yet," she said about unilateral action.

"Until this special session ends, and the Legislature has provided their ultimate decision, then we will look at what our next opportunities are to advance the priorities of Alaskans," she said.

The legal opinions that say the legislative prohibition on accepting Medicaid expansion money are unconstitutional rely on what's known as the Alaska Constitution's "confinement clause."

That's the sentence that says "bills for appropriations shall be confined to appropriations."

Despite that, and Alaska Supreme Court decisions interpreting it, legislators continue to use language in budget bills to implement policy.

One reason for that is that budget bills can be easier to pass. Legislators who join majority caucuses typically pledge to vote for the caucus budget, whatever it contains, as a condition of membership. So even if they find a provision in the budget that is personally distasteful, they are required to vote for it anyway. Such a lock-step rule doesn't apply to stand-alone bills, when legislators are generally free to vote their conscience.

This year, when the budget bill came to a floor vote, several majority caucus members who have publicly supported Medicaid expansion voted for a budget that contained the Medicaid funding prohibition.

But the legal opinions say that may not matter.

"This funding restriction may violate the confinement clause because it arguably amends substantive law," wrote Susan Pollard, chief assistant attorney general, representing Attorney General Craig Richards. Her legal memo was written for Walker and executive branch departments.

The budget bill also contained complicated language barring acceptance of Medicaid expansion money unless the governor had submitted a Medicaid reform plan to the Legislature and the Legislature had found that plan to be acceptable. The complicated language also required legislative approval for the use of the funds for Medicaid expansion.

That, too, Pollard wrote, was likely to violate the confinement clause.

A similar issue came to a head during the administration of former Gov. Tony Knowles, who was sued by the Legislative Council in an attempt to enforce language in a budget bill.

But the Alaska Supreme Court found then that the Legislature may not use appropriation bills to make changes in programs, Pollard wrote.

Legislative Legal Services attorney Doug Gardner, the Legislature's top legal adviser, provided similar advice to legislators.

"Please be advised that it is my opinion that this language is likely unconstitutional," wrote Gardner, in a memo to Rep. Chris Tuck, D-Anchorage, the House Democratic leader.

While the Medicaid expansion prohibition may not prevent Walker from unilaterally accepting the expansion, Davidson said that's a decision that will not be made until after the current special session ends.

"We have options available to us that include calling another special session, while some folks have talked about a potential ballot initiative, others have asked the governor to do unilateral expansion," she said. "All of those things are things we're certainly thinking about."

Pastor Julia Seymour, with Anchorage Faith and Action Congregations Together, or AFACT, said the group was disappointed that the Legislature has not taken a formal vote on Medicaid expansion outside the budget process, and that it included the prohibition language in the budget.

"AFACT has been in unqualified support of Medicaid expansion, however it happens," said Seymour, who is pastor at Lutheran Church of Hope in Anchorage.

She said she wants the state to use whatever option is the fastest to provide the additional Medicaid coverage to Alaskans, and that waiting would be harmful to Alaskans.

"We've been told that it might be part of a special session in October," she said. "The reality for us is that there are people who don't have insurance right now," she said.

Sen. Bert Stedman, R-Sitka, reviewed Medicaid expansion as chair of the Senate's Health and Social Services Committee. He predicted Medicaid would eventually be expanded.

"I think it is inevitable," said Stedman, one of the Legislature's moderate coastal Republicans. "We've got a substantial number of small, regional hospitals that are getting hit pretty hard with uncollectible bills," he said.

Medicaid expansion and reform, he said, include cost controls and containment that would save the state money at a time when it is facing big deficits.

"When you put them together, it's pretty hard to argue that it's not in the best interest of the state treasury, and the state," Stedman said.

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