When we first asked Gov. Mike Beebe about the "circuit breaker" idea out of Arizona (automatically opting out of Medicaid expansion if the feds reduce the matching rates in the future), he said it was fine but noted that states can already opt out at any time, an assurance he got in writing from the feds.
But he seems to have warmed up to the plan considerably, calling it a "brilliant idea" on AETN's "Ask the Governor" last week, and it's easy to see why — by legislating a trigger upfront, you guard against Republican concerns that once a program is expanded, it's politically impossible to pull it back, even if the feds don't hold up their end of the bargain down the road.
"If [the match rates] ever change, it's automatically done," Beebe said. "The state's automatically withdrawn from the program. ... One of the arguments is, well, once you start it you'll never be able to take it away. Nobody will have the political courage to vote to undo it. But if you put it on the front end where it's automatic, nobody has to vote on that later. That's what [Arizona Gov. Jan Brewer] did. She put a trigger mechanism that if the feds change that 10 percent ... then automatically their participation in the program ceases."
This seems like a perfect answer to conservative fears that some day down the line the feds will renege on their obligations under the law. Republicans have responded that past rulings from the Eighth Circuit would make it legally impossible to reduce Medicaid commitments.
According to the Arkansas Department of Human Services, changing eligibility thresholds would not run afoul of the Court and a "circuit breaker" would be legal.
"We are not aware of an 8th Circuit case that impairs Medicaid's ability to set eligibility thresholds at any point within federally established ranges, or to change those thresholds upon federal approval and compliance with the Arkansas Administrative Procedures Act," a DHS lawyer said. "There are two well-known 8th Circuit opinions from Arkansas. The first, Arkansas Medical Society v. Reynolds, concerned Medicaid reimbursements to health care providers and has no bearing on recipient eligibility criteria. The second, Pediatric Specialty Care, dealt with the scope of services that must be covered for children under the Early and Periodic Diagnosis, Screening, and Treatment program. That case limits Medicaid's ability to adjust what is covered for children, but has no bearing on who is eligible for Medicaid."