Maine Sues Over Medicaid MOE Requirements

NFIB v. Sebelius may be over, but the litigation against the PPACA continues. The latest lawsuit comes from Maine, which is challenging the constitutionality of the “maintenance of effort” provisions which require that states maintain whatever Medicaid eligibility standards they had in effect as of the PPACA’s enactment in March 2010. Failure to maintain these standards results in the loss of all current Medicaid funding. Maine’s brief is here.

Maine’s argument is that the MOE provision is part of the Medicaid expansion, and was therefore invalidated by the Court’s holding in NFIB. Among other things, Maine notes that the MOE rules were originally adopted in return for receipt of stimulus funding in 2008. That choice — accepting a temporary MOE requirement in exchange for stimulus money — was “voluntary.” The choice between accepting a continuation of the MOE rules and losing all Medicaid funding is not.

Even if the MOE provision were not considered part of the Medicaid expansion, and merely a revision to the traditional Medicaid program, the provision would be unconstitutional under NFIB insofar as it seeks to use Medicaid funding to coerce states into adopting new programs. Forinstance, the PPACA provides that once a state has adopted other policies, such as creating a qualifying health insurance exchange, the MOE requirement is lifted. So the MOE provision operates so as to condition Medicaid funding on the state’s cooperation with other policies, crossing the line of what is permissible under NFIB.