State’s High Court Upholds Ban on Medicaid Coverage for Recent Immigrants

Andrew Kitchenman | April 7, 2015 | Health Care
ACA insurance may be option for some, but not all, impacted by ruling; plaintiffs weigh U.S. Supreme Court appeal

Jenny-Brooke Condon, the lawyer for the immigrants who sued for access to Medicaid benefits, said they may appeal to the U.S. Supreme Court.
Five years after new immigrants living in the state first lost eligibility for Medicaid, the New Jersey Supreme Court has ruled that they don’t have a right to the federal healthcare coverage.

The ruling ends an extended legal battle that aimed to restore Medicaid coverage to those who have been in the country legally for less than five years.

But the length of time it took to reach a decision means that the healthcare options available today for many new immigrants are very different from what they were in 2010, when Gov. Chris Christie and the Legislature cut them off from Medicaid.

For example, the entire group of people originally affected by the change is now eligible for Medicaid, since they’ve been in the country for five years.

And some of the immigrants who’ve moved into the state in the last five years have a new option – they can buy subsidized health insurance through the federal marketplace launched under the Affordable Care Act.

This creates an odd situation in which those who are ineligible for Medicaid because of the 2010 change are eligible for subsidies under the ACA – but only those who are above the poverty level.

Subsidies are available to buy marketplace insurance for those with incomes between 100 percent and 400 percent of the federal poverty line, which is currently between $24,250 and $97,000 for a family of four.

Since Medicaid covers people with income up to 138 percent of the poverty line, or $33,465 for a family of four, marketplace insurance is an option for some of the new immigrants, but not those with the lowest incomes.

[related]While the federal government provides much of the funding for Medicaid – 50 percent for many people and 100 percent for those recently made eligible through the ACA — new immigrants were made ineligible for federal benefits under the 1996 welfare-reform law.

The federal government did allow states to choose to pay for Medicaid for these residents on their own, which New Jersey chose to do from 2005 to 2010.

The state funding was eliminated in Christie’s first budget proposal, as his administration sought to trim spending. The reduction in eligibility was ratified by the Legislature, which carved out exemptions to the five-year waiting period for pregnant women; children and young people until they turn 19; and those who had received coverage and were undergoing life-sustaining treatment.

A lawsuit was filed on behalf of the roughly 12,000 New Jersey residents who lost coverage, arguing that the state had denied their federal and state constitutional rights to equal protection under the law.

The New Jersey Supreme Court’s 4-2 ruling last week pheld an earlier appeals-court decision against the immigrants. Rather than writing their own opinions, the majority of justices said they supported the earlier decision “substantially for the reasons” cited by the appellate majority decision, while the minority said they disagreed for substantially the reasons cited in the appellate dissent.

The appeals court ruled 2-1 in 2013 against the immigrants, with Judges Susan Reisner and Joseph Yannotti finding that Congress’s control of immigration policy allowed it to give states the ability to provide or deny Medicaid to new immigrants.

In the dissenting opinion, Judge Jonathan N. Harris wrote that denying the new residents Medicaid would be arbitrary and that Congress had created a “crazy quilt of state immigration approaches” rather than the uniform approach needed to protect residents’ rights.

Seton Hall University law professor Jenny-Brooke Condon, the lawyer for the immigrants who sued, said they may appeal to the U.S. Supreme Court. She noted the highest courts in Maryland, Massachusetts and New York ruled that new immigrants were entitled to similar benefits, while the top court in Connecticut had an opinion that was similar to New Jersey’s. These divergent opinions increase the chances for a successful federal appeal, she said.

“I think the public can appreciate that this is something fundamentally unfair, because it allows New Jersey to treat lawful immigrants differently than citizens” even though both groups are paying taxes to pay for the benefits, Condon said.

“The variety of state outcomes … only confirms that there’s a lack of uniformity under the federal welfare reform act,” Condon said.

Condon argued the case in her role as director of Seton Hall’s Center for Social Justice, which trains third-year law students to work on cases for low-income clients in need of legal representation.

Condon said the loss of Medicaid has forced people to “agonize” over whether to seek healthcare that required out-of-pocket expenditures they cann’t afford. She said that while charity care offset some of those costs, people are still billed for a portion of the payments.

She said state residents cut out of Medicaid eligibility “may have been harmed in ways that we may not know,” citing the example of a woman at risk of ovarian cancer who didn’t undergo regular screenings recommended by her doctor.

“We’ve given those lawful residents permission to live here, permission to work here, and many of them work here and do pay taxes,” but they are left without healthcare based entirely on how long they’ve lived in the state, Condon said.

While it’s not clear how many immigrants in New Jersey are affected by the ruling, it’s likely to be similar to the estimated 12,000 affected in 2010 since immigration patterns have been consistent, said Raymond J. Castro, senior policy analyst for New Jersey Policy Perspective.

He said of the estimated $25 million that the state is saving annually by limiting eligibility, “when I used to work in the Department (of Human Services), we called that a rounding error.”

While he said the financial savings from the eligibility change was relatively small, “the human cost I think is huge, and it just sends the wrong message to the Latino community,” which state officials have been encouraging to apply for Medicaid, Castro said.

Castro noted while people were able to maintain coverage while being treated for life-threatening illnesses, they were dropped from Medicaid when their treatments ended.

“It was a very draconian step,” he said, adding that the restrictions meant some parents couldn’t afford treatment for the same illnesses for which their children were covered.

He added that the state and federal governments had added welfare and healthcare benefits to low-income parents over time, after finding that it didn’t make sense to deny services to the parents responsible for children benefiting from government programs.

“If parents couldn’t pay rent, the whole family got evicted. We went through that whole evolution in welfare and now it’s a step backwards,” Castro said.