Preserving Healthcare

2010–2014

For low-income families, access to medical care through the federal Medicaid program (Med-QUEST in Hawaiʻi) is critical to their health. For some, it is a matter of life and death.

In 2010, LEJ and pro bono partners Alston Hunt Floyd & Ing intervened to prevent the state of Hawaiʻi from cutting off Med-QUEST medical coverage to thousands of Hawaiʻi residents who relied on the program for their healthcare needs, including life-sustaining treatments such as dialysis and chemotherapy.

LEJ was successful in fending off the cuts for five years as the the case was litigated successfully at the trial court level, overturned by the Ninth Circuit Court of Appeals, and then turned down for reconsideration by the U.S. Supreme Court. Fortunately, during the five years of litigation, the Affordable Care Act (“Obamacare”) was passed, providing an opportunity for nearly all of the residents affected by the cuts to secure health coverage without interruption.

Background

In 2010, as a cost-saving measure, the state intended to cut Med-QUEST for Hawaiʻi residents living here under the Compacts of Free Association (COFA). These members of our community, who come from three different countries in Micronesia, face many challenges in the United States, including widespread discrimination.

The Republic of the Marshall Islands, the Republic of Palau, and the Federated States of Micronesia have special relationships with the United States, which are defined under the different COFA agreements between the U.S. and each of the three sovereign states. The U.S. and COFA states have reciprocal economic and military agreements that allow citizens of COFA states to live and work in the U.S. Hawai‘i is home to many individuals and families from these nations who work, attend school, and contribute to the strength and diversity of our island community.

Beginning in 1997, the state had covered eligible COFA residents through Med-QUEST programs. In response to reduced revenues after the Great Recession, the State of Hawaiʻi decided, in 2010, to save money by ending Med-QUEST coverage and creating a markedly inferior plan, Basic Health Hawaiʻi (BHH).

Under this newly proposed plan, annual coverage would have been limited to just 10 days of inpatient hospital care, 12 outpatient visits, and a maximum of four prescription medications per month. This level of coverage is inadequate for the typical Medicaid patient, let alone one with severe chronic illness.

Even worse, BHH’s meager coverage would have cut off life-saving treatments such as chemotherapy and dialysis, making this cost-cutting measure a life-threatening one for Micronesian kupuna and people with disabilities. These residents have no access to comparable healthcare in their countries of citizenship and no means to afford expensive medical treatment.

Legal Challenges

The state first announced the new plan in 2010, but failed to provide sufficient notice of the changes, or an opportunity for public comment. LEJ and its partners, Alston Hunt Floyd & Ing, as well as Bronster Hoshibata, brought a class action lawsuit, Sound v. Koller, which successfully challenged the state’s actions as a violation of due process.

After the lawsuit, the state went through the necessary administrative procedures and implemented Basic Health Hawaiʻi in July, 2010. In response, LEJ and its co-counsel brought a second federal class action lawsuit, Korab v. Fink (formerly Korab v. Koller), asserting that the cuts constituted discrimination on the basis of national origin and alienage and were in violation of the Equal Protection Clause of the U.S. Constitution.

In December 2010, the U.S. District Court in Hawaiʻi granted a preliminary injunction that halted BHH and required that the state continue the more comprehensive Med-QUEST coverage. The state appealed to the U.S. Court of Appeals for the Ninth Circuit, and oral arguments were heard in September, 2012.

On April 1, 2014, the Ninth Circuit ruled that the state of Hawaiʻi is not constitutionally obligated to provide state health insurance with the same level of benefits as the federally-funded Medicaid program covering non-COFA residents. The state agreed to continue to provide Med-QUEST coverage for COFA residents pending a request to the U.S. Supreme Court to reconsider the case.

On November 3, 2014, the U.S. Supreme Court denied the request to take up the case. LEJ and its partners continued to litigate the case, pursuing state claims after the federal constitutional claims had been foreclosed, exhausting all options in an effort to preserve healthcare coverage for thousands of COFA residents.

Ultimately, after it became clear that the passage of the Affordable Care Act would provide a viable option for health coverage for nearly all of the people affected by the Med-QUEST cut, the case was dismissed. LEJ then worked with community partners to encourage the administration to implement the cuts in a way that would ensure minimal impact to the health of COFA residents. To its credit, the administration adopted many of the recommendations and the harm to the COFA community was significantly reduced.

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