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Court Rejects Effort To Revive Missouri Medicaid Expansion, But Legal Fight Just Beginning

A Cole County judge Wednesday rejected an effort to allow Medicaid expansion, a victory for Republicans who oppose a voter-approved initiative to provide the health care program to the working poor.

But the setback for Medicaid expansion proponents may be temporary. The three women who sued to get into the program are planning to appeal, and the case is likely to go to the Missouri Supreme Court.

In August 2020, voters approved a constitutional amendment expanding eligibility for Medicaid to 138% of the federal poverty level — about $17,800 a year for a single person. Currently, Missouri’s Medicaid program only allows people with children to sign up. A person raising one child would have to make less than $3,000 a year to qualify.

Missouri lawmakers refused to appropriate money for expansion, which prompted Gov. Mike Parson to pull back plans he sent to the federal government to expand the program. Three women sued, arguing that the legislature’s decision not to appropriate money for expansion doesn’t remove responsibility for the state to allow people in the expansion population to sign up for coverage by July 1.

But Cole County Judge Jon Beetem found that the amendment ran afoul of another part of the Missouri Constitution that bars initiatives requiring “the appropriation of revenues not created by the initiative.”

“The Missouri Constitution provides that state revenues may not be expended without an appropriation,” Beetem wrote. “The Plaintiffs admit that a supplemental appropriation would be required to fully fund expansion and implicitly request such an appropriation when they ask this court to order that ‘plaintiffs and similar situated individuals shall be provided [Medicaid] benefits beginning on July 1, 2021.’ The court lacks the authority to order such relief as the legal effect would be a court ordered appropriation.”

Beetem went on to write that the state constitution “provides that the people, by initiative, may only spend or appropriate the revenues that they raise in the initiative.”

“If the court allows them to spend other state revenues by initiative, such action would deprive the General Assembly of its constitutional right to appropriate revenues in all non-initiative circumstances,” Beetem wrote. “As Plaintiff readily admitted at argument, under existing law, the choice of the General Assembly is either to fund the expansion or not have a Medicaid program at all. Without addressing the multiple and serious consequences of terminating the Medicaid program as a whole, given the choices above, Amendment 2 does direct or restrict the General Assembly’s ability to change the appropriation. The result cannot be harmonized to avoid striking down the initiative.”

Beetem’s ruling is similar to what a number of Republican lawmakers have argued over the past few months: that since there was no specific funding mechanism to follow through with Medicaid expansion, the legislature was under no obligation to appropriate funds for the endeavor.

“If Amendment 2 was validly enacted, the plaintiffs are absolutely right,” Beetem wrote, referring to the Medicaid expansion measure. “Any appropriation for Medicaid services would be available for all eligibles including the Medicaid Expansion class of eligibles — not just those who are eligible prior to July 1, 2021. Existing case law makes it excruciatingly clear that the General Assembly cannot, via the appropriations process, exclude the class of eligibles created by Amendment 2.”

The upshot of Beetem’s ruling, at least for now, is that people within the Medicaid expansion population can’t sign up for coverage starting on July 1. But attorneys for the three women said that the case will be appealed.

“We are disappointed in today’s ruling, but believe the court of appeals will disagree,” said attorneys Chuck Hatfield and Lowell Pearson in a statement. “The trial court’s analysis here found that ‘plaintiffs were absolutely right’ on the issues that were presented to the court. The court then found that the initiative was not validly enacted because it used the initiative to appropriate. This is not an issue the state raised or argued at trial.”

Hatfield and Pearson also said, “We believe the Court of Appeals already decided” in a prior case “that Amendment 2 is a valid use of the initiative process and that it did not unlawfully appropriate funds.” Hatfield tweeted later on Wednesday afternoon that he believes the case should be appealed directly to the Missouri Supreme Court.

All sides agree that the stakes of this case are high.

If Medicaid expansion proponents are successful, it is likely that Missouri legislators will have no choice but to appropriate more money for Medicaid. And if they don’t offer the program, Medicaid could run out of money, with providers not being reimbursed for services.

If judges find that the state doesn’t have to sign up people in the expansion population, then it’s highly unlikely that Missouri will follow through with Medicaid expansion — and essentially render the voter-approved constitutional amendment inoperable.

Republicans have argued that Medicaid expansion will be a long-term financial drag on the state, especially if they have to direct general revenue dollars that currently go toward schools or economic development to cover the state portion of expansion. But Medicaid expansion proponents have said other states that adopted expansion haven’t seen cost overruns — and point to how the American Rescue Plan for coronavirus relief would provide more than a billion dollars to potentially cover the entire cost of the program for years.

Follow Jason on Twitter: @jrosenbaum

Copyright 2021 St. Louis Public Radio