Daily Independent (Ashland, KY)

June 17, 2013

Attorneys argue over Medicaid lawsuit

By RONNIE ELLIS
CNHI News Service

FRANKFORT — An attorney for Gov. Steve Beshear’s administration Monday asked a Franklin Circuit Court Judge to dismiss a tea party activist’s suit challenging Beshear’s decision to expand Medicaid under the Affordable Care Act, saying the suit is premature and lacks any demonstration of particular harm to the plaintiff.

Franklin Circuit Judge Phillip Shepherd heard oral arguments from Patrick Hughes, a northern Kentucky attorney and former deputy state Attorney General hired by the administration to defend the suit, and David Adams who represented himself though he’s not an attorney.

Shepherd has already ruled in a separate suit filed by Adams challenging the establishment of a Health Benefits Exchange where individuals can shop for insurance and a component of the ACA that Adams has legal standing in that case because he’s a Kentucky taxpayer.

On Monday Hughes argued Adams lacks legal “standing” to challenge the decision on Medicaid expansion because he cannot show he suffers any “particularized damage” from the expansion.

Adams responded that “the very idea that the bedrock principle of liberty (is no direct damage) is extremely offensive to me.”

Hughes argued that because the federal government will pay 100 percent of the costs of the expansion for the first three years, Adams’ complaint is properly before a federal court and that regardless of jurisdiction Adams faces no potential individual damage different from any which every other taxpayer faces.

Hughes’ argument is that since Adams faces no “specific, particularized damage” to himself, his argument is a political policy dispute and should properly be argued in the political arena of the legislature rather than in the courts.

He also argued that since there has been no regulatory or administrative action thus far advancing the expansion which must still get approval from the federal government, the issue isn’t “ripe” for adjudication.

But Adams responded with two arguments: first that the underlying reason for the challenge is his contention that a 1966 law which gives the administration and the Secretary of the Cabinet for Health and Family Services authority to do what is necessary to access federal Medicaid dollars is a violation of the Kentucky Constitution which prohibits the exercise of “absolute power.”

“That wasn’t (the legislature’s) power to grant,” Adams said.

“You’re saying the underlying statutory basis (for the expansion) is an unconstitutional grant of power by the legislature?” Shepherd asked and Adams answered yes.

Secondly, Adams argued that it’s disingenuous for the administration to argue its decision to expand Medicaid is not certain because information on the Health Benefits Exchange website clearly demonstrates the administration’s intention to secure federal approval for expansion.

 Shepherd summarized Hughes’ argument on that question as claiming Adams’ suit is a “pre-emptive action,” attempting to halt the expansion before it can be done and thereby create a ripe legal question.

But Adams countered there will be no real way for him to challenge the expansion once it’s in place.

“You’re saying there would be no way to un-ring the bell,” Shepherd said and again Adams answered yes.

Adams had filed a motion in response to the administration motion to dismiss the case and Shepherd gave Hughes until Friday to respond in writing.

He said after that, he will take the arguments and motions “under submission and issue a ruling as soon as possible.”

Beshear announced in May he would expand Medicaid to those who earn up to 138 percent of the federal poverty level, a provision of the ACA which seeks to create near universal health insurance coverage.

Republican state lawmakers argue Beshear cannot expand Medicaid without legislative approval but Beshear, citing the 1966 law Adams is challenging, says he has the authority to promulgate Medicaid regulations to access available federal Medicaid funds.

The Medicaid program is funded on a federal-state match system which is calculated based on a state’s income and population statistics. Historically in Kentucky, the state pays 30 percent of the cost with the remaining 70 percent picked up by the federal government.

The new expansion will be funded entirely by the federal government for three years and after that the federal match drops to 90 percent over three years.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.