Alaska judge to hear arguments in Medicaid expansion case

A state court judge plans to hear arguments Thursday in a lawsuit challenging Alaska Gov. Bill Walker's authority to expand Medicaid without legislative approval.

The case was brought by the Legislative Council, which is comprised of state House and Senate lawmakers. All but one of the members — Democratic Rep. Sam Kito III — belongs to the Republican-led majorities.

Supporters of the lawsuit see it as a separation of powers issue. Some opponents see it as counterproductive and a waste of money.

The case centers on whether the expansion population is a mandatory group for coverage under Medicaid or an optional group. The federal healthcare law expanded eligibility for Medicaid and the U.S. Supreme Court in 2012 upheld most of law.

But it also found that states cannot lose existing Medicaid funding if they don't expand Medicaid coverage.

The lawsuit contends Walker overstepped his authority in expanding Medicaid on his own last year. It argues the expansion population is an optional group that cannot be covered unless approved by the Legislature.

Attorneys for Walker counter that the high court's decision did not strike down the provision expanding eligibility but instead struck down a penalty for states that do not comply with it.

Walker last year accepted an Anchorage law firm's offer to help the Department of Law with the case pro bono.

In expanding Medicaid, Walker followed a process for a governor seeking to spend more in federal or other funds on a budget item than allocated by the Legislature. He acted after legislators tabled expansion — one of his priorities — for further review.

The lawsuit seeks to have Medicaid expansion without legislative approval struck down as unconstitutional. It's unclear how that would play out should the Legislative Council prevail. At year's end, about 8,000 Alaskans had enrolled in the expanded program, which launched Sept. 1.

It wasn't immediately clear when Superior Court Judge Frank Pfiffner, who's hearing the case in Anchorage, would issue a decision. His ruling could be appealed.

"It would probably stress those who have already signed up, that is for sure," said Senate Majority Leader John Coghill, R-North Pole, a leading voice in support of the council suit.

He thinks legislators would have to have a vote on expansion and that it would force a conversation on next steps.

"I think there are many people in the Legislature that would go along with the Medicaid expansion as long as we had the reforms," he said.

Legislators already have begun hearings on bills aimed at curbing and containing Medicaid costs. Medicaid reform is one of the stated priorities of the Senate majority.

Kito, who voted against the lawsuit, said he thinks it is "all about making a statement rather than doing the right thing for the state of Alaska." Medicaid expansion is a positive, Kito said.

Lawsuits have been filed in at least two other states over expansion. In Ohio, expansion was upheld. Litigation is still pending in Arizona.



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