Federal Judge Blocks Kentucky’s Medicaid Work Requirements

WASHINGTON (CN) – Noting a “stunning lack” of consideration in Kentucky’s proposed new Medicaid plan, a federal judge on Friday blocked a first-of-its-kind bid by the state to tie Medicaid benefits to work requirements.

Under Kentucky’s proposal, Medicaid recipients would have been required to work or engage in other qualifying activities to receive benefits, but Boasberg said the Health and Human Services secretary failed to consider whether it would help provide medical assistance to the state’s citizens – one of Medicaid’s key objectives.

“For starters, the Secretary never once mentions the estimated 95,000 people who would lose coverage, which gives the Court little reason to think that he seriously grappled with the bottom-line impact on healthcare,” U.S. District Judge James Boasberg wrote in a 60-page ruling.

“This … omission renders his determination arbitrary and capricious,” Boasberg wrote.

Attorney Jane Perkins with the National Health Law Program welcomed the decision.

“We were glad to get it,” Perkins said in a phone interview.

Perkins, along with attorneys from the Kentucky Equal Justice Center and the Southern Poverty Law Center, filed the class action complaint on Jan. 24 on behalf of 16 Kentucky Medicaid recipients who feared they would lose their health benefits under the new plan.

“We certainly think it’s a narrow opinion, but it’s one that really I think gets at the essence of what was underway here, which was an attempt to transform Medicaid,” Perkins said. She added that the plan would restrict coverage for adults covered under the state’s Medicaid expansion program, which opened up benefits to adults under 65 at 133 percent of the federal poverty level.

According to the opinion, Health and Human Services only considered whether the Kentucky program would improve health and quality of life outcomes, along with upward mobility.

“While those may all be worthy goals, there was a notable omission from the list: whether Kentucky Health…would help provide health coverage for Medicaid beneficiaries,” Boasberg wrote.

According to Boasberg, Health and Human Services failed to consider whether the plan would actually cause some recipients to lose coverage.

“This oversight is glaring, especially given that the risk of lost coverage was ‘factually substantiated in the record,'” Boasberg wrote.

The Centers for Medicare and Medicaid rolled out a new policy in January allowing states to get waivers under Section 1115 of the Social Security Act to circumvent President Obama’s federal health care law, which prohibits work requirements.

Kentucky was the first state to jump on board with the waiver, but several others were soon to follow.

Friday’s opinion notes that Kentucky’s waiver application itself estimated the plan would cut Medicaid benefits for 95,000 recipients by the program’s fifth year.

The program would have required at least 80 hours of work, job training, schooling or community service per month to preserve benefits. It also sought to limit retroactive eligibility, implement varied premiums based on income and impose stricter reporting requirements.

The opinion notes that “the vast majority” of public comments Health and Human Services received about the plan were critical and focused on concerns that it would limit access to health coverage for low-income people.

“To top it off, numerous comments also suggested that these new administrative requirements would increase ‘clerical and tracking errors and delays,’ which in turn would ’cause inadvertent terminations,'” Boasberg wrote.

The Department of Justice, which defended the lawsuit, did not return an email seeking comment on Friday’s ruling.

Perkins said she expects the government to appeal the decision.

“But for today,” she said, “this is a good decision for Medicaid enrollees in Kentucky.”

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