(Bloomberg) -- The U.S. Supreme Court rejected a bid by Maine to escape one requirement of Obamacare, as the justices prepare to rule on a more far-reaching challenge that might unravel the health care law.

The justices Monday left intact a federal appeals court decision that said Maine must continue offering Medicaid coverage to young adults until 2019.

The dispute turned on an Obamacare provision that requires states to maintain their existing eligibility standards for children as a condition of receiving federal dollars under the Medicaid health-care program for the poor.

Maine’s top health official, Mary Mayhew, sought to drop the state’s longstanding Medicaid coverage for 19- and 20-year- olds. The Obama administration refused to allow the change, pointing to the Affordable Care Act provision.

Mayhew sued, arguing that the state was being unconstitutionally coerced into keeping that coverage. A Boston- based federal appeals court rejected that argument.

The Supreme Court will rule by the end of the month in its current Obamacare case, a dispute over the reach of the tax subsidies the law created to make insurance affordable. A group of challengers contends the law allows subsidies in only about a third of the states, those that have set up their own online exchanges for people to buy policies.

A variation of the coercion argument was before the Supreme Court three years ago, when it considered a broad constitutional challenge. One aspect of that ruling said the federal government can’t threaten to withhold existing Medicaid funds from states that refuse to expand the program to cover people at higher income levels.

The appeals court in the Maine case said that state’s situation was different because it wasn’t being required to expand coverage.

The case is Mayhew v. Burwell, 14-992.

Instant Insights /

Supreme Court rejects PPACA requirement bid from Maine

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