(CN) - The Affordable Care Act requires Maine to continue to provide Medicaid coverage to 19- and 20-year-olds from low-income families, the 1st Circuit ruled.
In 2012, Maine sought to drop Medicaid coverage for 19- and 20-year-old children in low-income families, coverage the state had provided for 20 years, to cover a budget deficit.
But the federal Department of Health and Human Services would not approve the change, because the Patient Protection and Affordable Care Act requires states accepting federal Medicaid funds to "freeze" their Medicaid eligibility standards for children until 2019.
Before the expansion of Medicaid effected by the Affordable Care Act in 2010, Medicaid did not require states to cover non-pregnant, non-disabled children ages 18 to 20 as a condition of participation in the program, but it permitted states to do so at their discretion.
Those states which chose to do so were required to provide the same mandatory benefits to children aged 18 to 20 as they provided to other children.
Maine agreed to continue providing coverage for low-income individuals aged 18 to 20 in 2009; the next year the Affordable Care Act required the state to continue doing so for another nine years in order to receive Medicaid funds.
After HHS declined to approve Maine's proposed 2012 changes to the program, the state sought court review of the decision, arguing that as it had no opportunity to restrict its eligibility standards before the ACA went into effect, the federal government's stance is unconstitutional.
However, on Monday, the 1st Circuit ruled that the Affordable Care Act's provision "does not create a new program and falls comfortably within Congress's express reservation of power to 'alter' or 'amend' the terms of the Medicaid statute in its coverage of previously covered groups."
The history of the Medicaid program shows that it has gradually expanded the definition of "child" to include 18- to 20-year-olds, even when these individuals are treated as adults for other purposes. Therefore, the Affordable Care Act's requirement cannot be described as a major shift in the program, the court said.
Further, Maine cannot argue that the law is "coercive," because the state allegedly has no choice but to participate in Medicaid.
"As the Supreme Court noted long ago, an attempt to determine when 'inducement' to comply with a condition on the use of federal funds crosses the line into 'compulsion' would 'plunge the law into endless difficulties,'" Judge Sandra Lynch wrote, quoting Supreme Court precedent.
The provision does not step on state sovereignty, the court ruled, as setting conditions of eligibility for participation in Medicaid is not a core state function, such as, for example, regulating state elections.
"To the contrary, [the ACA] simply requires an extension of states' prior choices to participate in a limited federal-state cooperative program," Lynch said.
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