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Wednesday, March 27, 2024 | Back issues
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Medicaid Work Requirements Struck Down in Two States

A federal judge struck down the work requirements for Medicaid recipients in Arkansas and Kentucky on Wednesday, effectively blocking the Trump administration's plan to revamp the country's healthcare program for the poor.

WASHINGTON (CN) — A federal judge struck down the work requirements for Medicaid recipients in Arkansas and Kentucky on Wednesday, effectively blocking the Trump administration's plan to revamp the country's health care program for the poor.

In two orders, U.S. District Judge James E. Boasberg in Washington, D.C., found the U.S. Department of Health and Human Services did not adequately consider whether the work requirements impair Medicaid’s core mission of providing health care coverage to the needy.

"[HHS Secretary Alex Azar] needed to consider whether the demonstration project would be likely to cause recipients to lose coverage and whether it would cause others to gain coverage," Boasberg wrote in the Arkansas case, Charles Gresham et al. v. Alex Azar. "He did neither."

The orders did not address whether work requirements are inherently incompatible with Medicaid, leaving open the possibility of HHS approving similar plans in the future.

Last year, the Trump administration announced that HHS would allow states to impose work requirements on Medicaid recipients, to help the poor become more "self-sufficient" and "healthy."

Critics accused the administration of attempting to gut the 50-year-old law. and several health care advocacy groups mobilized to file lawsuits.

Kentucky became the first state to adopt the new work requirements last year, but a lawsuit delayed implementation. That lawsuit, Ronnie Maurice Stewart et al. v. Azar, fell to Boasberg, who struck down the state's plan in June and sent it back to the federal government for review. HHS reapproved Kentucky’s plan in November, leading to another lawsuit.  

Court documents show nearly 100,000 Kentucky residents could have lost their Medicaid coverage.

Arkansas’ program, which began last March, has taken coverage away from 18,000 people who did not fulfill the new requirements, according to statistics compiled by the state. Ten residents filed a lawsuit in August, saying HSS had acted arbitrarily and capriciously in approving Arkansas’ new rules.

HSS approved similar waivers for eight states, including Indiana, Arizona and Michigan. New Hampshire’s work requirements are set to take effect next week, which prompted another lawsuit seeking to block the rules.

HSS officials could not be reached for comment late Wednesday.

Seema Verna, the administrator for the Centers for Medicare and Medicaid Services who vigorously pushed for work requirements last year, said the agency will continue to give states flexibility with Medicaid program.

"We believe, as have numerous past administrations, that states are the laboratories of democracy and we will vigorously support their innovative, state-driven efforts to develop and test reforms that will advance the objectives of the Medicaid program," she said in a statement.

Kentucky Gov. Matt Bevin will appeal the ruling, The Associated Press reported.

Bevin, a Republican, has threatened to get rid of Medicaid expansion entirely if the state can't impose work requirements. The move would leave 500,000 people without coverage.

Arkansas Gov. Asa Hutchinson, a Republican, has not commented publicly on the ruling.

The National Health Law Program and the Southern Poverty Law Center, which represented the plaintiffs in both cases, praised the rulings.

"The ruling is a significant rebuff of the Trump administration’s nefarious attempts to turn Medicaid, a program designed to ensure access to health care, into a work program,” said Samuel Brooke, deputy legal director of the Southern Poverty Law Center.

Jane Perkins, legal director for the National Health Law Program, said HSS did not properly consider the consequences of allowing states to impose work requirements.

"Rather than consider the Medicaid Act’s aim of furnishing medical assistance, the [HSS] secretary doubled down on his consideration of other aims for Medicaid — including the administration’s stated aim of exploding the ACA’s Medicaid expansion,” she said in a statement.

Medicaid covers about one in five Americans, from children and the elderly to disabled adults.

The Affordable Care Act expanded the program to include many low-income adults who could not obtain health insurance through their employers. Many of those affected by the work requirements are those who gained coverage through the expansion.

A recent study from the Kaiser Family Foundation, a nonpartisan group focusing on national health issues, found 60 percent of nonelderly adults on Medicaid work full- or part-time.

Kentucky’s program, Kentucky HEALTH, would have required adults from 19 to 64 to work at least 80 hours per month. Volunteering, caring for a sick relative and attending school could count toward the mandated hours.

Pregnant women, disabled people and those in drug treatment programs were exempted.

Arkansas’ program, Arkansas Works, was similar to Kentucky’s, but applied to adults from 19 to 49.

In approving the states’ plans, HSS officials said the work requirements would save money and push former Medicaid recipients into jobs with health insurance coverage. They also pledged large outreach and education campaigns and an easy online reporting system for recipients to log their work hours.

But in his rulings, Boasberg, an appointee of President Barack Obama, repeatedly chastised HSS for not providing any evidence to back up its claims.

"Not only did [HSS] fail to address whether coverage loss would occur as predicted, but they also ignored that commenters had projected that such loss would happen regardless of the exemptions and the education and reporting process," Boasberg wrote in the Arkansas case. "Indeed, some comments pinpointed online-only reporting as a source of coverage loss."

In addition, court documents show that some Medicaid recipients, even those with a job, were removed from Medicaid rolls without their knowledge.

One plaintiff in the Arkansas case, Adrian McGonigal, worked in the shipping department of a food service company. When the work requirement rules took effect, the 40-year-old typed his employment information into the state’s online reporting system.

McGonigal said he did not know he had to visit the site each month to report his employment status. Four months later, he went to fill a prescription and found out he no longer had Medicaid coverage. Without the $800 to pay for the medicine, McGonigal became ill, missed several days of work and his employer fired him. 

Boasberg cited McGonigal and other plaintiffs with similar stories while chastising HSS.

"Not only did [HSS] fail to address whether coverage loss would occur as predicted, but they also ignored that commenters had projected that such loss would happen regardless of the exemptions and the education and reporting process," Boasberg wrote. "Indeed, some comments pinpointed online-only reporting as a source of coverage loss."

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Categories / Government, Health, Law

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