By Tim Murphy
Using 1115 Waivers to Fulfill the Affordable Care Act’s Promise
In the last few months Montana has taken substantial steps toward joining Iowa, Arkansas, Michigan, and Indiana as states that are to fulfilling the promise of Affordable Care Act by expanding their Medicaid programs through special waivers. The Affordable Care Act (ACA) was designed to drastically reduce the number of uninsured people in the United States by providing access to affordable health insurance to all Americans. Despite struggles with implantation, and continuing legal threats, the ACA has been largely successful at expanding access to health insurance to middle class Americans. However, it has fallen woefully short of providing the same access to low-income Americans.
The ACA was designed to have Medicaid provide insurance for low income Americans. Medicaid is a public
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Massachusetts General Hospital, 1846
insurance program that is partnership between the states and the federal government. Each state runs a unique Medicaid program within the parameters set by the federal government and with substantial financial support from the federal government. The ACA required states to expand Medicaid to all Americans whose family incomes fell below 133% of the poverty level. The federal government would pay for the first three years of the expansion and then 90% of the costs for all of the following years. States that refused to expand would have faced potentially serious financial repercussions for their current Medicaid programs. In 2012, Supreme Court ruled that the possible repercussions for states choosing not to expand Medicaid were too sever and therefore “coercive” and ruled unconstitutional.
The Court’s decision made the Medicaid expansion optional for states. Political opposition to the ACA, and President Obama, in both state legislatures and in governors’ offices has caused over a dozen states to choose not to expand Medicaid. Based on a belief that states would expand Medicaid programs the ACA only provides subsidies for purchasing health insurance to individuals above the poverty level. Now there are an estimated 4 million people living below the poverty line without access to Medicaid or health insurance subsidies. Meanwhile people with higher incomes are given government assistance in the form of insurance subsidies.
In response to this coverage gap, or to try to take advantage of the overwhelmingly good deal the Medicaid expansion represents for states, many states whose leaders were/are politically hostile to “Obamacare” have found an alternative method to expanding Medicaid. Working with the Centers for Medicaid and Medicare Services (CMS). Indiana, Arkansas, Iowa, and Michigan states have utilized an §1115 waiver to negotiate expansions that a structurally different than those envisioned by the ACA. Montana is the latest state to try to join them.
Named after Section 1115 of the Social Security Act §1115 waivers have been part of the Medicaid program for decades. They serve as a means for states to experiment with new demonstration projects, which are supposed to be evaluated to determine their effectiveness. Waivers allow states to negotiate with CMS to design a feature of their Medicaid program that does not have to conform to all of the rules established by the federal government. Prior to the ACA states had used §1115 waivers to change benefits packages, utilize non-emergency cost sharing, and expand managed care in Medicaid. The §1115 waivers are not a carte blanch to ignore all of the rules that govern Medicaid programs. CMS has set out formal rules governing the waiver process and cannot waive core requirements of the program and they are required to be budget neutral.
Each of the states that have expanded their Medicaid programs through and §1115 waiver have negotiated a slightly different arrangement with CMS. Arkansas is enrolling Medicaid expansion enrollees in qualified health plans on its state health insurance marketplace and utilizing the federal Medicaid funding to pay for those enrollees insurance premiums. Iowa used two §1115 waivers to set up a similar premium support model for beneficiaries over 100% of the poverty level and enroll those under 100% of the poverty level in Medicaid managed care. The plan covers 190,000 previously uninsured Iowans.
States seeking to expand through a § 1115 face more obstacles than just negotiating with CMS. Like a traditional Medicaid expansion and §1115 waive still requires legislative approval, and the legislative process is fraught with political pitfalls. Just ask the Governors of Utah and Tennessee. The Utah House of Representative and Utah Senate failed to reach a deal this session after they rejected the Governor’s original proposal. A special Tennessee Senate panel rejected a proposal the Governor had spent months negotiating with CMS. Fortunately, for low-income citizens of Montana their plan already has preliminary legislative approval.
While the jury remains out on the effectiveness of the §1115 waiver expansions compared to the traditional Medicaid expansion one thing is certain low-income people have better access to health insurance in states that have implemented §1115 expansions than those in states that have no expansion. Hopefully, Montana can avoid the conflicts that have stalled Utah and Tennessee’s’ proposals, and hopefully both of those states keep trying to find comprises that results in expansions. The ACA unintentionally created a coverage gap that affects the most vulnerable citizens. But states have the tools to close the gap. All states should pursue a Medicaid expansion of some sort because beyond being sound policy, Americans should not have their insurance status determined by their zip code.
Timothy Murphy anticipates graduating from Boston University School of Law with a Health Law concentration in May 2016.
But Do They Have Standing? The House and the ACA
Over the last year a considerable amount of ink and column inches have been spent on the House of Representatives of the United States’ (the House) lawsuit over President Obama’s decision do delay enforcing portions of the Affordable Care Act (ACA). At least a portion of that ink was spent on the absurdity of a lawsuit to enforce a provision of a law that the Speaker reportedly hates that the House has voted to repeal multiple times. But additional tweets, posts, and columns were dedicated to the more concrete legal question in the suit: Does the House of Representatives have standing to sue the President for failure to enforce the law? Or, is the Speaker wasting valuable taxpayers money as well as judicial and administrative resources on a political stunt.
After it appeared the suit might go away because the plaintiff lacked council, it appears that an initial
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resolution to the question of the House’s standing may be in the works. The Administration has filed a motion to dismiss the suit based on the plaintiffs’ lack of standing. Both sides have summited briefs in support of their position and District Court Judge Rosemary M. Collyer held a motion hearing for May 28, 2015. Soon we will find out at least initially if the House has standing to sue the Administration.
If you are not a law student, lawyer, or a political junkie you probably have two questions. One, what is the House suing the Administration for and two what is standing? The two questions are actually significantly intertwined. First standing is the term that federal courts used to describe who is able to bring a suit before them by determining what constitutes a case or a controversy. The constitution only permits federal courts to hear “cases and controversies.” Absent a case or controversy federal courts lack the power to decide the issues of a case.
Typically standing requires first that the plaintiff suffers a particularized injury-in-fact, not a generalized grievance suffered by everyone. Second, that the injury must be “fairly traceable to the defendant’s allegedly unlawful conduct.” Finally, the injury must be redressable by the relief requested by the plaintiff. However, the Supreme Court has allowed members of legislatures to also assert special institutional injuries, if the challenged action amounts to the nullification of a their vote. The Court articulated the standard in Raines v. Byrd. In Raines Members of Congress filed a suit challenging the constitutionality of the recently enacted line item veto. The Court found that the injury did not amount to vote nullification, but in doing so described what would count as such nullify a law or appropriation that has been properly enacted or the enforcement of a law that has been improperly enacted. The Court also gave significant weight Members in Raines retained their legislative power and could repeal the act in question if they had the political support.
In the suit pending before the Judge Collyer the House asserts that the Administration’s decision to delay enforcing the employer mandate portion of the ACA, and the manner in which the Administration provided for cost sharing reductions under the ACA has injured the House itself. The House’s complaint alleges “[t]he actions of the defendants… injure the House by, among other things, usurping its Article I legislative authority.” This very deftly is an attempt to avoid normal standing requirement by asserting the special type of institutional injury the Court recognized in Raines. However, like the plaintiffs in Raines the House’s alleged injury falls short of the threshold of vote nullification.
Administration has done nothing to nullify a congressional vote under the standard articulated in Raines. As the Court described in vote nullification is a very specific institutional injury. The House seeks to extend this narrow injury to any administration of the law with which it disagrees. This would not only be a massive expansion of what constitutes and injury for standing, but would ultimately endanger the Presidents authority to administer the law under the Article II take care clause.
The House also maintains the same type of legislative remedies that the plaintiffs in Raines had at their disposal. In fact, because in this action the House itself is the plaintiff rather than a small collection of members in Raines it maintains functionally more substantial legislative remedies. Article I provides Congress with the ability to enact legislation, the power to control appropriations, and in the most extreme cases to bring official charges of impeachment. Any and all of these powers provide an avenue for redress that is more appropriate than involving the court system. In fact the House has utilized its legislative power to try to repeal the ACA and restrict funding for the administration of the law. The only legislative power the Speaker Boherner is unwilling to pursue is impeachment, not because the House has cannot do so, but because of the political consequences.
The House’s argument for standing also seems to rely on an assumption that if it is not granted standing then the constitutional dispute “must be resolved by the fortunes of politics.” The relative merits of political or judicial resolution of constitutional issues notwithstanding (that would take another blog post to tackle… or an entire book), this argument relies on two incorrect assumptions; that private parties lack standing to challenge the action and that the requirements of standing can be waived by courts in the interest of public policy. Neither of these assumptions is true.
It is easy to imagine how another party having standing to challenge the Administrations actions. Any person whose employer has chosen not to provide health insurance to her would have standing. This uninsured individual would have to show that their employer’s decision not to offer health insurance was caused by the Administration’s failure to enforce the penalty. While this may be a difficult case to prove, it is completely conceptually possible and perhaps even likely to happen in the future.
The second assumption is that the standing requirement is a policy choice and not a constitutional constraint on federal courts ability to hear cases. While my personal beliefs are to the contrary, a strong argument could be made the allowing the House to have standing to bring actions such as this would be a beneficial public policy. But the federal courts are not able to make that choice. The Supreme Court has repeatedly emphasized that the standing requirements are based on the constitution not public policy. Granting an exception in this case on a public policy rational would overturn a century of case law concerning the standing requirement.
It is extremely difficult for Congress to ever meet standing requirements, and the House has almost certainly not met them in this lawsuit. The entire endeavor has been a phenomenal waste of taxpayer money, judicial resources, and all of the time and ink that we have spent covering it. But maybe that was the House’s intention all along; grabbing favorable newspaper headlines not judicial decisions.
Timothy Murphy anticipates graduating from Boston University School of Law in May 2016 with a concentration in Health Law.
