It was always clear that the expansion of Missouri’s Medicaid system would be heavily fraught and vigorously fought.
The state’s Republican-led legislature has rejected an enlargement of the system ever since the passage of the Affordable Care Act made it a possibility. When voters bypassed the legislature in 2020 and expanded Medicaid via a state constitutional amendment, few were shocked when lawmakers refused to add funding for the newly covered population of low-income Missourians. A high-profile lawsuit to determine the program’s future ensued.
Despite the stakes, the court record for that suit is short and stately. Just 63 days after circuit filing and nine days after arguments, the Missouri Supreme Court issued an unsigned, unanimous ruling that neither denied the will of the people nor trampled on legislative prerogatives, allowing the expansion to take effect and leaving questions about how much that will cost for another day.
Missouri Lawyers Media’s 2022 Lawyers of the Year — Chuck Hatfield, a partner at Stinson; Lowell Pearson, a partner at Husch Blackwell; and Joel Ferber, director of litigation for Legal Services of Eastern Missouri — were the core of the legal team that won the case. Drawing on knowledge that ranged from the text of the constitution to the mechanics of Medicaid, they focused on a simple argument: that the beneficiaries of the expanded system can’t simply be given or denied funding at will.
Their victory was aided by the sense of urgency that drove everyone from the attorney general’s office to the trial court to the Supreme Court itself to resolve the matter as quickly as possible.
“This was one of those cases where the entire legal profession comes together and says, ‘Let’s just go solve this problem,’” Hatfield said. “It’s neat to see.”
Voters in 2020 approved a constitutional amendment to expand the program known in Missouri as MO HealthNet. It now covers adults earning up to 138 percent of the federal poverty level, which includes as many as 275,000 low-income Missourians.
Under the Affordable Care Act, the state will recover 90 percent of the estimated $1.9 billion cost of that expansion from the federal government, leaving Missouri with a bill of about $130 million.
Prior to the vote, a pair of lawsuits had sought to keep the Medicaid measure off the August ballot, arguing that the expansion would create an unfunded mandate. The courts turned aside the challenge, allowing the vote to go forward but leaving the possibility that the measure could be struck down if voters approved it — which they did by a 53 percent to 47 percent margin.
The particular concern was a provision of the Missouri Constitution that says the initiative process “shall not be used for the appropriation of money other than of new revenues created and provided for thereby, or for any other purpose prohibited by this constitution.”
“Very early on it became apparent that the issue ultimately decided by the Supreme Court was going to be a big one, which is whether the measure needed to contain a funding mechanism,” Pearson said.
Pearson and Hatfield are both based in Jefferson City and frequently litigate issues related to governmental policy and constitutional issues. Pearson previously served as Missouri’s Deputy Director of Revenue and general counsel to Gov. Matt Blunt; Hatfield served as chief of staff and as counsel under former Attorney General Jay Nixon.
Ferber was brought into the case as the self-described “Medicaid guy” whose knowledge of the system helped the team explain its intricacies and allowed them to find appropriate plaintiffs for the lawsuit, which was brought on behalf of three Missourians who were eligible for the expanded coverage.
It was a case that took up evenings and weekends, with email exchanges at 1 a.m. and three-hour calls to determine what briefs would say. The team also included Michael Martinich-Sauter and Ryan Harding of Husch; Alixandra Cossette of Stinson; and Geoff Oliver and Samantha Schrage of Legal Services.
“Nobody stepped on each other’s roles, and everybody was really collegial,” Ferber said. “It was the smoothest co-counsel arrangement I’ve ever been in.”
“I’m going to give the whole team a pat on the back,” he said. “We spent a tremendous amount of time on briefs and on the phone, but there was no drama to it.”
Hatfield said that collegiality helped the team to ensure that it didn’t miss something important during the necessarily fast-moving litigation.
“The hive-mind approach of having three or five people at a time working on this helps to make sure you’re not missing some major angle,” he said.
Cole County Circuit Judge Jon Beetem initially struck down the expansion, ruling that it indirectly required the appropriation of revenues not created by the initiative. Just 20 days later, the parties argued the case before the Supreme Court, urging its judges to reverse that ruling.
The court’s members asked few questions, leaving the lawyers with little sense of whether their arguments had landed. It also marked one of the first decisions to include Judge Robin Ransom, whom Gov. Mike Parson had appointed to the court just months before.
Pearson, who clerked for the Supreme Court early in his career, said he wasn’t surprised that the court’s opinion featured no dissents.
“I don’t think it would have been in the institutional interest of the court to decide this, as an example, on a 4-3 decision where people could ascribe political motives to the majority and the minority,” he said.
The court said the expansion did not violate the constitution’s appropriation provision, holding that an initiative “that simply costs money to implement does not necessarily require the appropriation of funds so long as the General Assembly maintains discretion in appropriating funds to implement that initiative.”
That was just as the plaintiffs had framed it, arguing that while lawmakers could choose to reduce services across the board, they couldn’t withhold funding that targeted just the expanded population.
“It’s really hard to go in and defund those folks legally,” Hatfield said. “As a matter of substantive law, they have been added, and whatever money you put into that program has to be spread out among those people that are added.”
That, of course, leaves plenty of space for future battles over the appropriate appropriation for MO HealthNet.
The budget process is underway in the House and Senate. Already, lawmakers have proposed at least two constitutional amendments that would repeal or rework the Medicaid expansion.
Challenges also remain in enrolling people in the program. According to the Department of Social Services, only about 57,000 people had signed up as of Jan. 14.
Ferber, however, said that figure isn’t surprising and will improve as more people learn of their eligibility.
“Overall, people are applying, and they’re getting health services,” he said. While he’s keeping tabs on enrollment, he added, “I guess I’m still basking in the victory.”