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SCOTUS Medicaid Decision

June 06, 2022

“This case will leave many families … unable to meet their loved ones’ substantial care needs,” said Prof. Allison Hoffman of the Court’s recent decision.

On the Supreme Court’s recent decision in Gallardo v. Marstiller, Professor of Law Allison K. Hoffman:

In a slip opinion, the Supreme Court interpreted a provision of the Medicaid Act today to allow Florida’s state Medicaid program to recoup a share of money that a Medicaid beneficiary wins through litigation. Under contention in Gallardo v. Marstiller is the section of the Medicaid Act that, as an condition of Medicaid eligibility, assigns to states money that a beneficiary receives as “payment for medical care from any third party.” This language includes money won in torts (i.e., accident) cases and is an exception from the Act’s general prohibition from a state taking a beneficiary’s property to pay for care. The exception is triggered by, for example, state statutes that guide the terms of such recovery.

In this case, Gianna Gallardo was injured in 2008 as a 13 year-old when hit by a truck while getting off of her school bus and “remains in a persistent vegetative state.” Her parents sought over $20 million in damages but eventually settled for $800,000, of which just over $35,000 was expressly designated for past medical expenses. Florida’s law enables the state to a 37.5% share of total recovery up to the amount paid in medical assistance. The question in this case was whether Florida could get its share of only the $35,000, or of the total recovery, which includes money to compensate future medical expenses, which Medicaid may or may not pay, and noneconomic harms like pain and suffering. The majority in an opinion written by Thomas interpreted the statute to allow the larger amount. Sotomayor and Breyer dissented.

This case shines a light on problems in the larger system. First, litigation reform and other systemic problems prevent people who have been seriously injured from recovering enough to pay for their full harms. Second, even with Medicaid coverage, Gianna Gallardo’s family will encounter significant expenses for her care. This case will leave many families like Gianna’s unable to meet their loved ones’ substantial care needs.

Hoffman is an expert on health care law and policy. She examines some of the most important legal and social issues of our time, including health insurance regulation, the Affordable Care Act, Medicare and retiree healthcare expenses, and long-term care.

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