March 28, 2019

Federal judge blocks Medicaid work requirements in Arkansas, Kentucky

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    A federal judge yesterday struck down Medicaid work requirements in Arkansas and Kentucky—a decision that some legal experts say could eventually wind up before the Supreme Court.

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    Background

    U.S. District Court Judge James Boasberg issued rulings in two separate cases filed against Medicaid work requirements in Arkansas and Kentucky.

    In the Kentucky case, the National Health Law Program (NHeLP), Kentucky Equal Justice Center, and the Southern Poverty Law Center in early 2018 filed a lawsuit seeking to block Kentucky from implementing Medicaid work requirements. Boasberg in June 2018 vacated HHS' approval of the state's Medicaid waiver request seeking work requirements, noting that HHS "never adequately considered whether [the requirements] would … help the state furnish medical assistance to its citizens, a central objective of Medicaid." The judge sent the waiver request back to HHS "for further review."

    In response to the ruling, CMS launched a new 30-day public comment period on Kentucky's waiver request and, in November 2018, re-approved the work requirements, which are set to take effect in April. NHeLP, Kentucky Equal Justice Center, and the Southern Poverty Law Center then filed an amended complaint asking the court to declare CMS' latest approval of the work requirements "arbitrary and capricious."

    The Arkansas lawsuit is similar to the one challenging Kentucky's Medicaid work requirements and came after Boasberg first vacated HHS' approval of Kentucky's Medicaid waiver. However, Arkansas' work requirements took effect last year, and the lawsuit seeks to suspend the requirements.

    Judge strikes down Medicaid work requirements

    Boasberg in his rulings for both cases said the federal government failed to demonstrate howwork requirements would advance Medicaid's purpose of providing health coverage, Politico reports.

    He wrote that HHS' approval of the work requirements "is arbitrary and capricious because it did not address ... how the project would implicate the 'core' objective of Medicaid: the provision of medical coverage to the needy." Boasberg added, "The [c]ourt cannot concur that the Medicaid Act leaves the [HHS] Secretary so unconstrained, nor that the states are so armed to refashion the program Congress designed in any way they choose."

    In addition, Boasberg in his rulings wrote that HHS failed to adequately assess what effects Medicaid work requirements would have on health coverage in Arkansas and Kentucky. Boasberg in his Kentucky ruling noted that federal officials "did not consider the health benefits of the project relative to its harms to the health of those who might lose their coverage," and in his Arkansas ruling noted that HHS failed to fully evaluate the burden work requirements would place on Medicaid beneficiaries in need of health coverage. For instance, Boasberg in his Arkansas ruling wrote about an employed Medicaid beneficiary who did not know he had to report his compliance with the state's work requirements each month. The beneficiary lost his health coverage, then became sick and lost his job, Boasberg wrote.

    Boasberg in the ruling, remanded the approvals of both states' Medicaid waiver requests back to HHS. Boasberg said HHS must reconsider the approvals and take into account the effect the work requirements could have on low-income individuals who depend on Medicaid for health coverage, the Post reports.

    What the ruling means for work requirements

    Adam Meier, secretary of Kentucky's Cabinet for Health and Family Services, said the judge's ruling will "setback to our implementation schedule." But he added, "[W]e believe that we have an excellent record for appeal and are currently considering next steps."

    In Arkansas, the state's Attorney General, Leslie Rutledge (R), said she's also determining next steps.

    Jane Perkins—legal director of the National Health Law Program, which is a District-based plaintiff in both cases—said the judge's ruling means Arkansas officials "are going to, at the very least, have to put [the requirements] on hold," while federal officials review them. According to Bloomberg, the ruling does not require Arkansas to re-enroll individual who lost coverage under the work requirements in 2018, but it does allow those individuals to apply to re-enroll.

    Verma says CMS will continue approving Medicaid work requirements

    CMS Administrator Seema Verma in a statement indicated the rulings would not deter CMS from approving Medicaid work requirements. She said, "We will continue to defend our efforts to give states greater flexibility to help low income Americans rise out of poverty. 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."

    According to Kaiser Health News, many health care experts expect cases regarding Medicaid work requirements eventually will end up before the Supreme Court (Tozzi/Harris, Bloomberg, 3/27; Pradhan, Politico, 3/27; Baker, "Vitals," Axios, 3/28; Goldstein, Washington Post, 3/27; Galewitz, "Shots," Kaiser Health News/NPR, 3/27).

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