Politics & Policy

Governors Flouting the Law on Medicaid

(Juan Moyano/Dreamstime)
Who is best serving the citizens’ interests?

Frustrated governors whose state legislatures refuse to go along with Medicaid expansion have sometimes opted to flout the law and “go it alone” without legislative approval. But bypassing the people’s representatives undermines the legislative process and gives reason to doubt that the governor has seriously considered whether dramatically transforming the state’s Medicaid program is in the citizens’ best long-term interests. It also usually ends up in court.

And that’s where it looks as if Alaska governor Bill Walker will be for the foreseeable future. In July, Governor Walker announced his plan to expand Medicaid despite the legislature’s repeated rejection of expansion.

A joint committee of the Alaska legislature recently decided to file a lawsuit against the governor in order to protect the Alaska constitution and the legislature’s sole authority to make laws. While the court denied the legislature’s initial request to temporarily halt Medicaid signups, the lawsuit will continue, likely making its way to the Alaska Supreme Court.

Regardless of the ultimate legal outcome, Governor Walker’s go-it-alone maneuver will inflict long-lasting damage on his state’s legislative process. He should take a look at Arizona, where officials are already learning that hard lesson.

Arizona legislators, represented by attorneys at the Goldwater Institute, are suing former governor Jan Brewer for bypassing the state’s voter-enacted constitutional requirement that there be no new taxes to fund Medicaid expansion unless they are approved by a legislative supermajority. Governor Brewer’s plan called for a mandatory provider tax on hospitals. Despite attempts to strong-arm the legislature into approving the tax — such as ordering lawmakers to the capitol for an overnight special session and threatening to veto all unrelated bills — the governor was unable to garner the necessary two-thirds supermajority. Circumventing the legislature and the constitution, the governor signed the taxing authority over to the Medicaid director.

Unfortunately, Governor Brewer is not alone in playing fast and loose with the state constitution — or in being called to account for it. Years after unilaterally imposing both Medicaid expansion and a taxpayer-funded health-insurance exchange, Kentucky governor Steve Beshear is still defending those executive orders in court.

Against this backdrop, Governor Terry McAuliffe wisely reconsidered his own plans to foist Medicaid expansion on Virginians without legislative approval. Governor Walker would be wise to follow Governor McAuliffe’s lead.

In order to pay for the administrative costs of an Alaska Medicaid expansion, Governor Walker is seeking funds from the state’s Mental Health Trust Authority. That agency was established to support mental-health services for Trust beneficiaries, not to bankroll a broad-based federal program. Beneficiaries could challenge this action in court, forcing Governor Walker into an additional legal battle.

It is only by raiding this trust fund that Governor Walker would be able to circumvent the legislature to pay for the hefty administrative costs of expansion. But the Foundation for Government Accountability, a Florida-based advocacy group, estimates, using the federal government’s own data, that Governor Walker is woefully underestimating these costs. Furthermore, Washington, D.C., is slated to cut the Medicaid funds it sends to the states at the end of 2016.

State taxpayers will be on the hook for an increasingly greater share of future Medicaid expansion costs.

Deeper cuts may come sooner than that. The federal government has already twice tried to change the rules of the funding game. During the 2011 debt-limit negotiations, President Obama proposed a “blended” Medicaid match rate that would have reduced the overall Medicaid payments to states. The president’s budget for fiscal year 2013 once again proposed reducing Medicaid payments to states.

The result is that state taxpayers will be on the hook for an increasingly greater share of future Medicaid expansion costs, while the legislative process designed to protect their interests is further eroded. And no one can put a price tag on that.

That is why Alaska lawmakers should be applauded for standing up to executive bullying and defending their vital lawmaking role on behalf of their constituents.

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