Working poor lose round in Medicaid court fight

Patient advocates said they will continue to fight a move by Maine Gov. Paul LePage to drop thousands of low-income residents from the state’s Medicaid rolls after a federal judge refused to block the cuts temporarily. The U.S. Dept. of Health and Human Services approved the move in January, allowing Maine to bypass federal eligibility requirements to balance its budget.

The federal maintenance-of-effort provision requires that states retain the same Medicaid eligibility levels they had in 2010, when the Affordable Care Act became law, unless they receive special waivers from the government. Maine Equal Justice Partners, a nonprofit legal aid group suing HHS over its approval of the cuts, said it was disappointed that the reductions will go into effect and pledged to continue pushing forward with the case.

“Federal law protects low-income people and people with disabilities from losing their health insurance coverage through Medicaid,” said Jack Comart, MEJP’s litigation director. “By granting Maine permission to reduce eligibility, the [Health and Human Services secretary] has violated the law by cutting health care benefits for people with disabilities and for low-income seniors. Those actions are unacceptable.”

At this article’s deadline, HHS and the Maine Dept. of Health and Human Services had not returned messages seeking comment.

In 2012, state legislators approved a plan by LePage to tighten eligibility requirements for MaineCare, Maine’s Medicaid program. His plan included eliminating coverage for parents who earned between 100% and 133% of the federal poverty level and dropping coverage for 19- and 20-year-olds. LePage also proposed reducing coverage under the Medicare Savings Program by eliminating coverage for parents earning between 133% and 150% of the poverty level.

Because the cuts would interfere with the maintenance-of-effort provision, the state was required to get permission from HHS before moving forward. In January, HHS granted permission for the state to make some cuts under its plan, including reducing coverage under the Medicare Savings Program. Those reductions are expected to affect about 15,000 people.

Maine Equal Justice Partners, in cooperation with the National Health Law Program and the Center for Medicare Advocacy, filed suit in U.S. District Court for the District of Maine on behalf of five Maine residents whose health care coverage was set to be terminated. The plaintiffs sought an emergency restraining order against the cuts, but District Judge John A. Woodcock on Feb. 28 declined to block the reductions. The eligibility cuts took effect March 1.

“The contested provisions of the Medicaid Act are unusually complex, voluminous and dense,” Woodcock said. “Although the plaintiffs present a plausible interpretation of the ACA, so does the [HHS] secretary, and the court cannot conclude with any confidence that one interpretation is more likely to succeed than the other. As the plaintiffs have the burden to establish a likelihood of success on the merits, the balance tips against them.”

Medical association opposes cuts

The Maine case is significant because it could affect future interpretation of the Medicaid maintenance-of-effort requirement that mandates certain eligibility levels, said Jane Perkins, legal director for the National Health Law Program.

“The case is important, because we think the maintenance-of-effort provision is very clear on its face, and not only has clear wording but clear intent to hold Medicaid programs in place” while health system reform is being implemented, she said. But Perkins noted that the HHS approval of Maine’s Medicaid cuts is time-limited — as is the maintenance-of-effort requirement.

The HHS approval is only through the end of the fiscal year, so Maine would have to request another review for the next fiscal next year if it wanted to continue the eligibility cuts, she said. The minimum Medicaid coverage requirements, meanwhile, are in effect only until HHS deems the states’ new health insurance exchanges to be fully operational, which is anticipated to occur for the 2014 coverage year.

“Unless the court tells HHS that they’re violating the law, we are very concerned that [the reduced eligibility] will be approved again,” Perkins said.

Since the maintenance-of-effort provision was established under the ACA, Hawaii and Wisconsin also submitted letters to HHS requesting waivers to enact Medicaid cuts, according to the National Assn. of State Budget Officers. The organization does not track the status of such requests, but Perkins said only Maine had received approval so far.

The Maine Medical Assn. is not directly involved in the lawsuit, but it opposes the eligibility reductions to the state’s Medicaid program.

“Obviously we would oppose any of the cuts, and we would be disappointed with any of the cuts” moving forward, said Andrew MacLean, the MMA’s deputy executive vice president and general counsel. “We have standing policy that goes back to 2002 that supports universal coverage through a pluralistic approach. … We have always argued that Medicaid is a good deal for the states.”

The eligibility squeeze means that doctors probably won’t be paid for their treatment of many of the working poor, MacLean said.

“What we’re talking about here are the people who are hardworking people in our state. They could be fishermen and lobster men,” he said. “I think Maine doctors will continue to do the best they can to serve their patients whether they have coverage or not. It probably means some doctors will get a couple lobsters” instead of being paid for their services.