STATE OF HAWAII WILL CONTINUE TO PROVIDE BENEFITS TO COFA RESIDENTS

News Release from Office of the Attorney General April 8, 2014 

HONOLULU – Attorney General David M. Louie announced today that the State of Hawaii will continue to provide benefits to the Compacts of Free Association (COFA) residents until a full and final resolution of the issues in Korab v. McManaman is reached. “The State will make sure that COFA residents continue to have uninterrupted access to their health benefits while this lawsuit is pending” said Attorney General Louie.  

In early April 2014, the Ninth Circuit ruled that when Congress enacted the Welfare Reform Act of 1996 and eliminated all federal funding for health benefits for COFA residents, the State of Hawaii could not be mandated to fund the federal government’s portion of the benefits. The Ninth Circuit’s decision confirms that the federal government cannot impose a duty on States to perform a function for which it does not provide funds.  

This ruling was a preliminary finding by the appellate court; there are still other proceedings that may occur.  

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Slash to Benefits in Hawaii Upheld by the 9th

By Tim Hull, Courthouse News, April 1, 2014

(CN) - Hawaii can go ahead and cut health benefits for residents of Pacific islands where nuclear weapons were once tested, the 9th Circuit ruled Tuesday.

The decision removes an injunction that had stood in the way of the state offering significantly reduced health care to residents of Micronesia, the Marshall Islands and Palau, where the military tested bombs in the 1940s and 1950s.

Under a Compact of Free Association (COFA) with the United States, natives of the island nations qualify as nonimmigrants, and were until the Welfare Reform Act of 1996 eligible for Medicaid benefits.

Hawaii stepped in to cover the islanders until 2010, when the state, facing budget problems, limited them to no more than 10 days of hospital care per year, 12 outpatient visits per year, six mental health visits and a maximum of four medication prescriptions per month.

Tony Korab led a group of islanders, many of whom have persistent and serious health conditions they say are related to the bomb tests, in a class action against the state's new program, called Basic Health Hawaii (BHH). They alleged that the cut in benefits violated the equal-protection clause of the U.S. Constitution and the Americans with Disabilities Act.

Though U.S. District Judge J. Michael Seabright granted an injunction in Honolulu and ordered Hawaii to reinstate the old benefits, a divided appeals panel found Tuesday that the state had merely done what Congress allowed.

"The basic flaw in the proposition is that Korab is excluded from the more comprehensive Medicaid benefits, which include federal funds, as a consequence of congressional action," Judge M. Margaret McKeown wrote for the majority. "Congress has plenary power to regulate immigration and the conditions on which aliens remain in the United States, and Congress has authorized states to do exactly what Hawai'i has done here-determine the eligibility for, and terms of, state benefits for aliens in the narrow third category, with regard to whom Congress expressly gave states limited discretion. Hawai'i has no constitutional obligation to fill the gap left by Congress's withdrawal of federal funding for COFA Residents."

Judge Richard Clifton argued in dissent that states cannot use budget woes to justify discrimination.

"The state could provide to them the same benefits it provides to citizens," he wrote. "It had, in fact, provided the same benefits to COFA Residents for fourteen years, until budgetary woes motivated the state to try to save money, by exercising an option given to it by Congress. But the state's fiscal condition does not provide the compelling justification required under the Equal Protection Clause to justify unequal treatment of aliens."

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LINK: Full Text of Ruling

Guam PDN: Feds: Don't expect big compact check

SA: Micronesians' lawyer to fight ruling

Nov 2, 2010: Abercrombie admits responsibility for costing Hawaii millions under Compact of Free Association