A 9th U.S. Circuit Court of Appeals panel ruled Tuesday that the state can resume offering fewer health care benefits to Micronesian migrants than those given other Medicaid recipients.

The decision vacates a 2010 preliminary injunction handed down by U.S. District Judge J. Michael Seabright that prohibited the state from denying migrants full Medicaid benefits.

Congress, as part of comprehensive welfare reform back in 1996, cut health care funding for migrants covered under the Compact of Free Association, which allows Palau, Marshall Islands and Federated States of Micronesia citizens to live and work in the United States in exchange for the U.S. controlling extensive strategic land and water in the Pacific Ocean.

Hawaii opted to include COFA residents in its health insurance plans for many years. Gov. Linda Lingle’s administration attempted in 2009 and 2010 to reduce coverage because of fiscal challenges but was stopped both times by Seabright.

COFA residents argued to the 9th Circuit that the state violated the Equal Protection Clause of the 14th Amendment by providing them less health coverage than citizens and legal residents eligible for Medicaid reimbursements, but the court disagreed.

"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 Hawaii has done here — determine the eligibility for, and terms of, state benefits for aliens … with regard to whom Congress expressly gave states limited discretion," Judge M. Margaret McKeown wrote in the court’s opinion.

The state Attorney General and Human Services and Health departments issued a joint statement saying, "The state will review and analyze the decision and its programs to determine how best to proceed." Gov. Neil Abercrombie’s office deferred to the joint statement.

Attorney Paul Alston, who served as co-counsel representing the migrants, did not return a Hono­lulu Star-Advertiser request for comment.

According to a report sent the U.S. Department of the Interior’s Office of Insular Affairs by Abercrombie in 2011, the state spent $114.9 million in 2010 caring for and educating Pacific migrants, compared with $32 million in 2002.

Additionally, U.S. Rep. Colleen Hana­busa introduced a bill last year to restore Medicaid for compact migrants, and U.S. Sen. Mazie Hirono pushed for similar legislation as an amendment to a comprehensive Senate immigration bill.

In 2009 the state Department of Human Services proposed saving the state $8 million by offering noncitizens with less than five years’ residency a heath plan with reduced benefits rather than comprehensive state-funded care. The plan sparked a firestorm of opposition for not including dialysis and chemotherapy treatment, and Judge Seabright issued a temporary restraining order to prevent it from taking effect.

An amended version of the Basic Health Hawaii plan rolled out the following summer — including limited doctor, hospital and mental health visits, three procedures, emergency dental and medical care such as federally funded kidney dialysis and four medications a month including brand-name chemotherapy drugs — but Seabright halted the plan that December.

Since then the state has been complying with his ruling.

State House Vice Speaker John Mizuno, who has spoken out against health care cuts for Micronesians, described the ruling as concerning and a "game changer" regarding health care for COFA residents. The Marshall Islands Consulate General in Hono­lulu has already reached out to him, and the two plan to meet soon, he said.

"I don’t know ultimately what the Legislature or the governor will do at this point, so perhaps it’s premature for me to make any predictions, but the 9th Circuit is pretty clear on its ruling," Mizuno said.

"At this point I’m sure that both the Senate and House leadership teams need to meet, and from there it’s probably a good idea that they meet with the governor, the executive branch, and decide how we’re going to address this."

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The Associated Press contributed to this report.