08.06.2012 0

Maine’s shot across Obamacare’s bow

As originally published at ObamacareWatcher.org.

By John Vinci — The state of Maine on Aug. 1, 2012, sent a shot across the bow of Obamacare in the form of a letter to Secretary of Health and Human Services (HHS), Kathleen Sebelius.[1] The letter requests a reduction to Maine’s Medicaid eligibility threshold by Sept. 1, 2012 and threatens to sue if the Obama Administration does not agree to the changes. The letter, written by Maine Governor Paul LePage asserts Maine’s right not to be coerced by the federal government—a right confirmed by the Supreme Court’s Obamacare decision, NFIB v. Sebelius, not quite two months ago.

Gov. LePage hopes the proposed changes, expected to save Maine nearly $20 million, will help solve Maine’s fiscal woes.[2]

But a provision of Obamacare, called the “maintenance of effort” (MOE) requirement, bans states from lowering their Medicaid eligibility threshold until they establish a state health exchange. [3] Just like the Medicaid expansion requirement declared unconstitutional by a vote of seven to two justices at the Supreme Court, States that violate the MOE requirement risk losing all Medicaid funding.[4]

The Wall Street Journal reported that “within hours” of the Supreme Court’s decision in NFIB v. Sebelius,  Maine’s Attorney General’s office was studying what effect the case might have on Obamacare’s MOE requirement.  After studying the issue, the state’s Attorney General, William Schneider, says he’s convinced that Maine’s challenge to Obamacare is “on solid legal ground.”[5]

“The state of Maine is taking the right step in boldly challenging the Obama Administration’s threat to cut off all federal Medicaid funding due to the state’s decision to lower their Medicaid liabilities,” said Bill Wilson, president of Americans for Limited Government (ALG).

Early reports of Maine’s requested change claimed that HHS[6] and the Congressional Research Service (CRS)[7] disagree with Maine.  But HHS and CRS did not then have the benefit of seeing Maine’s legal analysis.  In a July 11, 2012, letter to Health and Human Services (HHS), Gov. LePage told HHS Secretary, Kathleen Sebelius, that he believed she would “reserve judgment until the law and facts are fully-presented.”[8]

Now that Maine has presented the “law and the facts” we know that it has two arguments.

First, Maine argues that Obamacare’s MOE requirement is “part and parcel” of its Medicaid expansion provision and thus was struck along with that provision.

But its stronger argument is that even if the MOE requirement was not overturned by NFIB v. Sebelius, the constitutional doctrine identified in that case renders the MOE requirement unconstitutional.  The Court in that case said, “Though Congress’ power to legislate under the spending power is broad, it does not include surprising participating States with postacceptance or ‘retroactive’ conditions.”[9] Obamacare’s MOE requirement, Maine argues, is such a “surprise,” “post-acceptance” condition that creates “gun to the head” coercion by threatening to revoke all Medicaid funding if a state reduces its eligibility threshold.

“The Supreme Court got one thing right in the much-maligned Obamacare ruling by Chief Justice Roberts: the states cannot be coerced into accepting escalating Medicaid costs by the federal government,” ALG’s Wilson stated.  “Maine Gov. Paul LePage is smartly taking the state flexibility that seven Justices affirmed and applying it to other aspects of Obamacare’s Medicaid requirements.”

However, if we are correct in assuming that the Obama Administration is unlikely to permit Maine to make this change to its Medicaid program, then we can hope that Maine’s ultimatum will result in giving the Supreme Court another opportunity to reprimand Congress for unconstitutionally using its spending powers to coerce the states.

Wilson challenged state lawmakers saying, ““It is time for every state to join Maine in declaring their right to determine their own Medicaid eligibility requirements without coercion from Obama and his Washington, D.C., cronies.”

John Vinci is a staff attorney with Americans for Limited Government and is the editor in chief for the www.obamacarewatcher.org website.


[1] Letter from Paul R. LePage, Governor of the State of Maine, to Kathleen Sebelius, Secretary, U.S. Dep’t of Health and Human Servs. (August 1, 2012) available at http://www.maine.gov/dhhs/documents/Sebelius-Kathleen-Letter-8-1-2012.pdf.

[2] Id. at 1.

[3] Patient Protection and Affordable Care Act, P.L. 111-148 § 2001(b)(2) (March 23, 2010).

[4] Id.

[5] Christopher Weaver and Louise Radnofsky, The Wall Street Journal, “States Interpret Ruling to Cut Medicaid Now” (July 6, 2012) http://online.wsj.com/article/SB10001424052702303684004577511103843368654.html.

[6] See Letter from Kathleen Sebelius, Secretary, U.S. Dep’t of Health and Human Servs. to the governors of the United States (July 10, 2012) available at https://docs.google.com/file/d/0B61rrpmRSrQWRkVFQzNNVWJ4LWM/edit?pli=1.

[7] See Memorandum from Kathleen S. Swendiman, Legislative Attorney, Congressional Research Service, to Evelyne P. Baumrucker, Analyst in Health Care Financing, Congressional Research Service, “Selected Issues Related to the Effect of NFIB v. Sebelius on the Medicaid Expansion Requirements in Section 2001 of the Affordable Care Act,” (July 16, 2012) available at https://docs.google.com/file/d/0B61rrpmRSrQWV0paN3dSa21WbEE/edit.

[8] Letter from Paul R. LePage, Governor of the State of Maine, to Kathleen Sebelius, Secretary, U.S. Dep’t of Health and Human Servs. (July 11, 2012) available at http://capsules.kaiserhealthnews.org/wp-content/uploads/2012/07/ltr-Sebelius-re-Pingree-11JUL2012.pdf.

[9] Letter from Mary C. Mayhew, Commissioner, Maine Department of Health and Human Services, to Richard R. McGreal, Associate Regional Administrator, Center for Medicare and Medicaid Services, U.S. Department of Health and Human Services (August 1, 2012) at 9 (quoting NFIB v. Sebelius, ___ U.S. ___, 132 S.Ct. 2556 (2012) at 54 of slip opinion) available at http://www.maine.gov/dhhs/documents/SPA-12-010-Eligibility-Cover-Letter-8-12-2012.pdf.

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