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New York’s Court of Appeals on Tuesday struck down on state and federal constitutional grounds a state law that bars most Medicaid coverage for tens of thousands of legal immigrants suffering from life-threatening illnesses. In a unanimous opinion, the court said that a state law enacted in response to the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 violates the New York and U.S. Constitutions by denying a benefit solely on the basis of a person’s status as a legal alien. Aliessa v. Novello, 73, marks the first state high court decision addressing whether Congress can, in the context of welfare reform, confer on states the authority to determine whether certain classes of legal aliens are eligible for Medicaid. The court, through Judge Albert M. Rosenblatt, said that while Congress has wide latitude in setting immigration policy, it must do so in a uniform matter and cannot delegate that power to the states. Notwithstanding the equal protection infirmity, Rosenblatt said, New York’s law cannot be reconciled with the state constitution’s aid to the needy provision. New York Gov. George Pataki indicated Tuesday that the state will comply and will not attempt to appeal to the U.S. Supreme Court; doing so would seemingly be pointless since the Court ruled on both state and federal constitutional grounds and its holding on the New York Constitution is not subject to review in Washington. The governor, however, said the ruling could have a profound impact on the still unresolved state budget, and he called on the federal government to pay at least a portion of the cost of providing Medicaid coverage for legal aliens. The case stems from the federal Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), the major welfare reform legislation of 1996, and New York’s response to that mandate. The statute was drafted in part to promote self-sufficiency and to discourage foreigners from immigrating to the United States simply to take advantage of welfare benefits. Title IV of the act restricts alien eligibility for Medicaid, but specifically authorizes states to provide benefits at their own expense. In response to PRWORA, the New York Legislature enacted Section 122 of the Social Services Law to deny Medicaid coverage — except for short-term emergency treatments — for most legal aliens who were ineligible under the new federal law. Several states, including New Jersey, Connecticut, Pennsylvania, California and Massachusetts, opted to provide comprehensive Medicaid benefits to all federally ineligible immigrants, while some states, including New York, Texas and Florida, declined. In New York, the Democratic Assembly majority proposed maintaining the benefits, but backed down under pressure from Republican Gov. Pataki and the GOP-dominated Senate, negotiating away that proposal in a budget deal. Twelve aliens, all of them legal residents of New York State and all of them suffering from potentially life-threatening illness which, but for Section 122, would be covered under state-funded Medicaid benefits, challenged the exclusion. Manhattan Supreme Court Justice Sheila Abdus-Salaam held in their favor. The Appellate Division, 1st Department, unanimously reversed in an unsigned two-paragraph ruling. Tuesday, the Court of Appeals adopted a strict scrutiny standard of review and unanimously parted with the 1st Department in a 26-page opinion. COMPLEX FUNDING SCHEME Medicaid is funded under a complex scheme involving both federal and state monies. For certain types of coverage, the federal and state governments share the expense. States are free to extend those benefits, as long as they agree to pick up the cost, and New York has done so. New York had long provided state Medicaid to the needy people regardless of whether they were legal aliens or citizens, but stopped doing so after PRWORA, resulting in a class action spearheaded by the Legal Aid Society, the Greater Upstate Law Project and the New York Legal Assistance Group. The plaintiffs alleged various constitutional breaches, and ultimately prevailed on every one. On the equal protection claim, the court declined to apply a rational basis test, as urged by the state, and instead employed a strict scrutiny standard. Under that standard, Section 122 cannot stand, the court said. “Lawful resident aliens benefit our country in a great many ways,” Judge Rosenblatt wrote. “Like citizens, they contribute to our economy, serve in the Armed Forces and pay taxes including, of course, taxes that fund state Medicaid. Nevertheless, aliens may not vote, which has historically inhibited their ability to protect their interests.” The court said that while Congress may distinguish between aliens and citizens in allocating welfare benefits, it cannot leave that choice to the states. To do so would, the court said, result in exactly the situation here: Aliens in New York being treated differently from aliens living in other states. Consequently, Section 122 violates both the Equal Protection clauses of the U.S. and New York State Constitutions, the court said. Assistant Solicitor General Deon J. Nossell, appearing for the state, argued that Section 122 did not violate the State Constitutional provision requiring “aid, care and support of the needy” (Article XVII, Section 1) in that it continued to provide coverage for emergency medical treatment. Plaintiffs, however, countered that Section 122 was bad law and perhaps even worse public policy. They observed that under the provision, diabetics were denied coverage for the insulin they need to stay alive, but would be covered when failure to receive their medication placed them in a life-endangering condition. CONSTITUTIONAL MANDATE In New York, Judge Rosenblatt said, “care for the needy is not a matter of legislative grace; it is a constitutional mandate” — and one that the state failed to heed when it enacted Section 122. “We conclude that Section 122 violates the letter and spirit of [the state constitution] by imposing on plaintiffs an overly burdensome eligibility condition having nothing to do with need, depriving them of an entire category of otherwise available basic necessity benefits,” Rosenblatt said. Elisabeth Benjamin, interim supervising attorney of the Health Law Unit for the Legal Aid Society, said a contrary ruling would have undermined the goal and necessity of having a uniform national policy on immigration. She said the decision makes clear that “the states are not allowed to pick and choose, only the federal government can make immigration policy.” Ellen M. Yacknin of the Greater Upstate Law Project in Rochester, N.Y., arguing for the plaintiffs, said that without Tuesday’s ruling, many of her clients would have died. Although it is unclear how many people will be affected by the decisions — estimates range from roughly 15,000 to about 170,000 — Yacknin said there is no question that New York will ultimately save money as a result of the decision. “It is absolutely clear based on all the economic analysis, and the state has never denied it, that providing primary and less-than-urgent health care coverage to lawful immigrants who live in New York state will save taxpayers millions of dollars because they won’t have to pay for critically expensive, last-minute medical care,” Yacknin said. Additionally, Yacknin said the “horrible policy” underlying Section 122 had potentially profound public health consequences if, for example, excluded aliens carrying communicable diseases went untreated because they lacked access to medical care.

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