Federal Judge Blocks Medicaid Work Rules In Blow to Administration

March 29, 2019 by Tom Ramstack

A federal judge this week struck down a Trump administration plan that could have required Medicaid recipients to work or volunteer as a condition of receiving subsidized health care.

At least 15 states were planning their own work for health care programs.

U.S. District Judge James E. Boasberg ruled that the work rules proposed by lawmakers in Arkansas and Kentucky for low-income residents violated the laws that set up the Medicaid program a half-century ago.

Medicaid is the federal government’s largest health insurance program but also its most expensive, costing taxpayers more than $580 billion a year. It covers about one in five Americans who otherwise could not afford adequate health insurance.

The Secretary of the U.S. Department of Health and Human Services already approved proposals by eight states for the Medicaid work requirements. Seven other states sought approval for similar programs.

Boasberg’s ruling put a stop to all of them.

“The court has said this before and will say it again: If, as Arkansas and HHS admit (and this court has found), ensuring Medicaid coverage for the needy is a key objective of the [The Medicaid Act], HHS’ failure to consider the effects of the project on coverage alone renders his decision arbitrary and capricious,” Boasberg wrote. “It does not matter that HHS deemed the project to advance other objectives of the act.”

Kentucky state officials estimated that nearly 100,000 of its residents would lose Medicaid coverage under its work requirements. About 18,000 Arkansas residents already have lost it.

Public policy groups such as the Kentucky Equal Justice Center, the Southern Poverty Law Center, Legal Aid of Arkansas and the National Health Law Program joined in a class action lawsuit to overturn the state plans and federal approval of them.

“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,” according to a statement from the Southern Poverty Law Center.

Federal officials denied they were trying to limit access to health care, only to encourage recipients to earn incomes.

Seema Verma, the Centers for Medicare & Medicaid Services administrator, said in a statement that the health program wants 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,” Verma said.

State officials in Arkansas and Kentucky said they were looking at options to override Boasberg’s judgment.

“Although a setback to our implementation schedule, we believe that we have an excellent record for appeal and are currently considering next steps,” said Adam Meier, secretary of the Kentucky Cabinet for Health and Family Services. He added that he believed Boasberg’s ruling was illogical.

President Donald Trump said in early 2018 he would support state efforts for work requirements on Medicaid recipients. Days later, the Centers for Medicare and Medicaid services sent letters to state health officials saying the federal government is interested in experimenting with work requirements.

Kentucky lawmakers immediately approved a work requirement proposal. It was followed within weeks by Kentucky residents filing the first class action lawsuit in U.S. District Court in Washington, D.C. opposing the program.

Advocates for the poor say many Medicaid recipients already are working but cannot earn enough money in their job markets to pay for adequate health insurance. Other recipients are too old or disabled to work, they say.

“It is nonsensical and illegal to add obstacles to Medicaid for large groups of individuals who are already working, or full-time health care providers for family members, or suffering chronic health matters,” said Jane Perkins, legal director of the National Health Law Program, a nonprofit that sued the government.

The cases are Stewart et al. v. Hargan et al., case number 1:18-cv-00152; and Gresham et al v. Azar et al., case number 1:18-cv-01900, both in the U.S. District Court for the District of Columbia.

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