Federal Judge Blocks Kentucky Medicaid Work Requirements

by Bamidele Ogunberu Posted on June 29th, 2018

Washington, D.C., USA: U.S. District Judge James Boasberg today blocked Kentucky’s Medicaid work requirements that was set to go into effect on Sunday, ruling that the Trump administration did not adequately consider before approving the state’s proposal whether work requirements would violate the program’s purpose of providing healthcare to the most vulnerable Americans. The controversial Medicaid waiver would have imposed work requirements on beneficiaries. Kentucky’s waiver would allow the state to deny coverage to any non disabled adult who cannot prove they are working, volunteering or in school for at least 20 hours per week.

The court decision is at least a temporary blow to the ambitious plans of Republican-led states and the Trump administration to remake the program. Friday’s decision is likely not the end of the matter as Kentucky and the administration are likely to appeal.

District court Judge James Boasberg, an Obama appointee, came down in favor of the plaintiffs who sought to block the work requirements from taking effect on July 1 as planned.

The 60-page ruling in the U.S. District Court for the District of Columbia vacated the Trump administration’s approval of Kentucky’s waiver and sent it back to the Centers for Medicare and Medicaid Services (CMS) for further review.

The decision is a victory for the group of Kentucky residents and activists who sued the administration for approving the waiver. The state had estimated that the work requirements and other restrictions would cut up to 95,000 people from Medicaid.

Kentucky Gov. Matt Bevin (R) has repeatedly said the state’s Medicaid expansion under ObamaCare is not fiscally sustainable, and that the waiver is needed to bring down the costs of covering so many new individuals.

Bevin had threatened to discontinue Medicaid expansion in the state, which covers more than 500,000 people, if the requirements were struck down.

Today’s ruling came in a lawsuit against Kentucky, one of the first states to have its proposal requiring certain Medicaid recipients to work (or else lose their benefits) approved by the Trump administration.

Kentucky was the first of four states to win approval for work requirements in a Medicaid waiver, and the decision could have nationwide implications. Close to a dozen other states are looking to adopt their own work requirements.

Top CMS official Seema Verma argued the administration has “broad authority” under current law to let states alter their Medicaid programs through waivers.

But Boasberg ruled the state’s waiver goes against the very purpose of Medicaid.

“The Secretary never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid,” Boasberg said in his decision. “This signal omission renders his determination arbitrary and capricious.”

The federal government is obligated under federal law to consider whether a Medicaid proposal advances the program’s objectives, the judge wrote, and the Trump administration failed to meet that standard before approving Kentucky’s plan.

The ruling puts the future of Medicaid work requirements in doubt. The Trump administration has made them a priority, encouraging states to put forward proposals that require many non disabled, non-elderly adults to work or look for employment. If they fail to meet these requirements, they could lose their health insurance.

Four states — Kentucky, Indiana, Arkansas, and New Hampshire — have had their work requirements approved by the administration. Seven others — Arizona, Kansas, Maine, Mississippi, Ohio, Utah, and Wisconsin — have proposals waiting for approval by the federal government.

The underlying case hinges on a pretty simple argument: Does requiring Medicaid recipients to work to receive benefits further the program’s goals? Many advocates, who argue that Medicaid is first and foremost a health insurance program, believe that work requirements are contrary to Medicaid’s purpose if they cut people’s access to health care.

The Kaiser Family Foundation has estimated that 1.4 million to 4 million Americans — out of about 70 million covered by Medicaid — could lose their coverage if work requirements were imposed nationwide. The vast majority of the coverage losses would result from enrollees failing to report their compliance to the state, not because they were failing to fulfill the work or job search criteria.
KY Medicaid waiver is vacated and remanded to CMS

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