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Capitol Correspondent
Particular budget cut reversed for good reasons
Intent and purpose notwithstanding, not every cut in Nebraska's state budget
is happening as it was cranked up to happen. In at least one particular
context, a significant cut appears likely to be blunted, and there are
important, humanitarian reasons why that reversal in policy should not be
lamented.
The specific example we have in mind has nothing to do with holding $300,000 worth of issued "just-in-case" checks in the state treasurer's vault. It's a lot less bizarre than that recently revealed situation.
A year ago this month, during a special session called to reduce spending, lawmakers approved a policy change that resulted in eliminating Medicaid health care coverage for a category of working yet low-income parents. (This was LB 8 of that special session.) The savings from restricting Medicaid eligibility in this fashion was expected to be about $18 million per year. The flip side of that decision, obviously, was that many more Nebraskans would be left without coverage for health care.
The cuts took effect, as intended and anticipated, but not long thereafter a class action lawsuit challenging the denial of health care coverage was filed in U.S. District Court. The suit contended that federal Medicaid law requires a transitional year of continuing health care coverage for those terminated from the regular program. State officials disputed that, of course, asserting a different interpretation of federal law.
The federal district court judge didn't think much of the plaintiffs' case and refused to issue an injunction, which would have temporarily restored transitional Medicaid coverage pending the outcome of a trial on the merits. The plaintiffs, through their attorneys and on behalf of themselves and the 10,000 similarly situated working yet low-income parents, appealed to the Eighth U.S. Circuit Court of Appeals.
Plain Meaning Prevails
On July 10, a three-judge panel of the Eighth Circuit unanimously reversed the District Court's ruling and ordered that court to issue an injunction against the state's action. The panel determined that the plaintiffs' case was likely to succeed on the merits, because the plain meaning of the federal Medicaid statute requires that the class of plaintiffs receive Transitional Medical Assistance (TMA).
The state subsequently petitioned for rehearing and further review by the full panel of the Eighth Circuit, but that petition was denied on Aug. 7.
The result, and current status of the matter, is that the state is enjoined from denying a year of transitional Medicaid to the working, yet low-income parents in the class, including any of those who found it necessary to pursue other avenues of eligibility (e.g., by quitting work) when LB 8 caused them to lose coverage prematurely.
It is anticipated that the District Court, having now ordered an injunction, will soon approve a negotiated protocol for implementing the transitional Medicaid coverage. It is likely to have an Oct. 1 start date.
While it strikes us as unreasonable and unfair to make these low-income Nebraskans go even longer without health care coverage, especially given the weakness of the state's case, apparently more delay is necessary for bureaucratic, administrative reasons.
Better to Accept the Decision
Presumably, the state is considering going to trial on the merits of the lawsuit. We hope that doesn't happen. Such a move would deserve to be viewed as a poor decision, nothing more than a dead-end matter and a waste of time and resources. Any final resolution on the merits would no doubt last well beyond the year of transitional benefits (presumably Sept. 30, 2004) and if the state did, somehow, ultimately prevail, it would be a nightmare practically speaking, if not a complete travesty of justice, if any court ruled that the costs of transitional health care coverage would have to be paid back by the recipients.
The bottom line as we view it is that this particular budget cut, for the year-plus involved, has been reversed for good reasons and justifiably so. The federal policy on transitional Medicaid assistance trumps what state officials were attempting to do; the result is that thousands of low-income Nebraskans can, when necessary, visit the doctor, go to the hospital and get their prescriptions filled.
Obviously, this reversal of a policy decision that was made in order to save $18 million or more has an impact on the state's budget at a time of great difficulty. However, as the Eighth Circuit panel observed, the health and well being of these citizens outweigh the budget-cutting interests of the state Legislature.
Moreover, as a result of the federal "Jobs and Growth Tax Relief Reconciliation Act of 2003," passed by the Congress and signed by the President late last May, Nebraska has received approximately $50.5 million as a one-shot increase of Federal Medicaid funding. Since that is intended for supplemental Medicaid spending, it would seem apparent that a source for the $18 million budget hit for temporary restoration of Medicaid coverage for 10,000 working yet low-income Nebraskans already exists.