Missouri Supreme Court upholds voter-approved Medicaid expansion

Jul. 22—JEFFERSON CITY — The Missouri Supreme Court has unanimously ruled in favor of the voter-approved Medicaid expansion plan.

Gov. Mike Parson's administration must follow the constitutional amendment voters passed with a 53% majority last August that extends eligibility for Medicaid to about 275,000 low-income Missourians, judges said.

Those residents will almost certainly now be allowed to join the state health care program despite the efforts of the Republican-led state legislature to block them by refusing to budget money for their enrollment. Parson in May nixed the expansion after getting a budget without additional funds for the expansion this year.

Expansion advocates soon sued Parson's administration.

On Thursday, the Supreme Court ruled that the Department of Social Services and the state's Medicaid program, MO HealthNet, "are bound by" the constitutional amendment governing eligibility, regardless of the amount of money lawmakers put toward the program.

"DSS has appropriation authority to provide services for all individuals eligible for MO HealthNet, including individuals eligible for coverage and services pursuant to" the amendment, judges ruled.

They made the decision after hearing the case just last week, and sent it back to Cole County Circuit Court for a judge to likely order the state to accept new enrollees.

The decision reversed an earlier one made by the lower court's Judge Jon Beetem, ruling that Parson's administration did not have to follow the constitutional amendment because it violated a section of the state constitution that prohibits using ballot measures to give the state authority to spend money. That power is reserved for lawmakers.

Republicans had relied on that argument during the legislative session this year to say that because the program's expansion would cost the state extra money, the decision to expand still lay with them.

Chuck Hatfield, one of the plaintiffs' attorneys, said the unanimous ruling upheld the voters' will.

"To have all seven of the judges agree sends a pretty important message that the law is very clear here," he said. "There's not a lot of room for debate. This was properly passed and it now needs to be implemented."

A spokeswoman for the Department of Social Services declined to comment.

The decision was cheered by Democrats, health care advocates and Missourians who are newly eligible for Medicaid under the expansion. Nina Canaleo, a 38-year-old Kansas City mother with multiple sclerosis, said in a statement released by Missouri Jobs With Justice that the coverage would help her "get the treatment I need to literally be able to keep walking."

"I have been waiting for this confirmation for so long," she said.

But Parson's spokeswoman suggested the governor's office wanted still to get approval by lawmakers before enrolling anyone.

"After today's court decision, the Executive Branch still lacks the necessary budget authority to implement MO HealthNet coverage to the expanded population," Kelli Jones said in a statement. "We are looking at what options may be available to us to seek additional budget authority and also pursuing legal clarity."

She did not clarify whether "budget authority" meant more money, or funds that lawmakers approve specifically for expansion.

A long history

The ruling was the culmination of nearly a decade of attempts by Democrats and health care advocates to get Missouri to join the program expansion created in the Affordable Care Act under President Barack Obama.

Missouri had one of the strictest eligibility thresholds in the nation to sign up for Medicaid. Almost no childless adults can be covered. Adults with children can enroll only if they earn less than 22% of the federal poverty level — about $5,800 a year for a family of four. Advocates said it created a "coverage gap" of working adults who couldn't qualify but don't make enough money for private insurance.

The Republican-dominated legislature has consistently refused to expand the program, with lawmakers arguing it is too costly and an unnecessary extension of welfare to able-bodied adults.

Progressive groups bypassed lawmakers last year by getting the expansion passed on a statewide ballot. At the time, Missouri was one of about a dozen states that had not yet expanded Medicaid. The constitutional amendment allows anyone making up to 138% of the poverty level to be covered, or about $17,700 for a single adult.

Expansion was supported by the Missouri Hospital Association and the Missouri Chamber of Commerce for the boon it could bring to health care providers, particularly in rural Missouri.

Parson agreed to implement it when it passed. But despite voter approval of the expansion, lawmakers repeatedly refused to budget the $130 million he requested, along with $1.6 billion in expected federal funding. Parson pulled the expansion plan in May, saying he did not have the "authority" to move forward without funding.

Lawyers for three Missouri women who would have qualified under the plan, argued in court that the budget lawmakers did approve for Medicaid did not distinguish between the "expansion population" and others who are covered. Attorney General Eric Schmitt's office argued that it did.

But Beetem ruled that Parson's administration could reject new Medicaid recipients on different grounds: that the ballot initiative was not "validly enacted" in the first place.

The seven judges of the Missouri Supreme Court disagreed, ruling that the ballot measure had not stopped lawmakers from budgeting as little or as much money as it wanted on the Medicaid program as a whole.

"The General Assembly chose to appropriate funds for the MO HealthNet programs for (fiscal year) 2022," the judges wrote. "This was one of presumably thousands of difficult decisions made each year during the appropriation process. But, having made this decision, DSS and MO HealthNet are bound by (the constitutional amendment) concerning which individuals are eligible to enroll when it spends the appropriated funds."

What's next?

Under the constitutional amendment, the new eligibility rules were to start July 1.

But Beetem will have to issue a court order for the state to enroll the newly eligible Missourians before they can begin signing up, and it's not yet clear when the expansion would begin.

Expansion involves an agreement between the state and the federal government, which picks up 90% of the tab on expansion costs, under the ACA. Missouri officials had filed those documents with the federal Centers for Medicare and Medicaid Services in February to prepare for the expansion, but rescinded them when Parson pulled the plans.

Attorneys for the expansion advocates and the state will likely discuss logistics and timing with Beetem before he orders enrollment, Hatfield said.

"These are details," he said. "No doubt they have to be enrolled."

Implementing the expansion at a judge's order also portends a rocky financial future for Medicaid, which does not have enough money in its current budget to cover tens of thousands of new enrollees for a full year. Parson may be forced to ask lawmakers who have adamantly rejected expansion to return to Jefferson City to allocate more funds.

Still, Democrats and advocates celebrated the ruling.

"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," House Minority Leader Crystal Quade said.

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