Federal judge blocks Medicaid work requirements in Kentucky and Arkansas – The Washington Post

March 27 at 5:26 PM

A federal judge in Washington threw a significant roadblock into the Trump administration’s efforts to require poor people on Medicaid to be compelled to work in exchange for health benefits, rejecting a Kentucky program for a second time while saying that rules in effect in Arkansas “cannot stand.

The twinned opinions, in a pair of states that have been national leaders in the move towards Medicaid work requirements, cast doubt on the Trump administration’s approvals of efforts to re-envision the public insurance program. The opinions undo the permissions the U.S. Health and Human Services Department gave those two states, telling the agency it must reconsider the two states’ applications with an eye towards the effect on poor people who depend on the coverage.

Judge James E. Boasberg, of the U.S. District Court of the District of Columbia, concluded that in letting Kentucky go forward with its requirements, HHS had been “arbitrary and capricious” — the same criticism he leveled once before.

The 48-page Kentucky opinion is the more emphatic of the two rulings, since the judge walks through the reasons he remains unpersuaded by even a second set of arguments by the administration as to why the program should be allowed to go forward.

But the 35-page Arkansas opinion has more immediate impact. It strips away the federal basis on which that state added work requirements last June that apply to more than 115,000 poor and working-class Arkansans under a part of Medicaid, known as Arkansas Works, that expanded under the Affordable Care Act. So far, about 18,000 people have lost coverage for failing to meet the rules, or failing to report to the state that they complied.

Jane Perkins, legal director of the National Health Law Program, a DC-based plaintiff in both cases, said that based on the judge’s ruling, Arkansas officials “are going to at the very least have to put [the requirements] on hold,” while federal officials reconsider them.

Arkansas Gov. Asa Hutchison (R), issued a statment, saying he was “disappointed in the decision handed down late this afternoon.” He said that after digesting the opinion overnight, he planned to “provide further comment tomorrow morning on the future of the Arkansas Works work requirement.”

While the judge’s rulings touch the two states most directly, they have potential ripple effects for six others that already received permission from the Trump administration to begin work requirements — and for seven more states waiting in line.

Seema Verma, administrator of HHS’s Centers for Medicare and Medicaid Services, struck a resolute tone: “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.”

Wednesday’s rulings came nine months after Boasberg, an appointee of President Barack Obama, first signaled his disapproval of the way President Trump’s health aides were handling the issue. Two days before Kentucky was to begin implementing the new rules, the judge stopped the state in its tracks.

Kentucky had been the first state to win permission to impose “community engagement” requirements in January, 2018, a day after Verma announced that the government would for the first time allow states to require low-income people to work, prepare for jobs, or volunteer as a condition of coverage.

The question of work requirements has emerged as a bright line in the ideological debate over the role and nature of the nation’s social safety net.

Administration officials, and a growing cadre of Republican governors, contend that such rules motivate low-income people to find work that will help them climb the economic ladder and eventually become self-sufficient so they no longer need public insurance.

The idea had been opposed by Barack Obama’s HHS and many Democrats, who regard it as a sharp break in Medicaid’s half-century history as an entitlement program, open to anyone eligible as a result of their income. Progressives contend that most poor people who can work already do and that access to health care is a precondition for some to hold jobs.

In his earlier, June 29 opinion in the Kentucky case, Boasberg held that the federal officials who approved the new rules had been “arbitrary and capricious,” neglecting to consider adequately whether the requirements “would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid.”

His ruling sent Kentucky’s request to begin its program back to HHS for another review. Five months later, the department reapproved Kentucky’s plan without any changes. The state had been preparing its delayed launch of Kentucky HEALTH, as it calls its program, for April 1, with the work rules to begin this summer.

Arkansas ended up being the first state to impose work requirements last June. The 18,000 people who have lost their Arkansas Works coverage were cut off between September and December for failing to comply for three months with requirements to work, train or volunteer for 80 hours per month — or for failing to report they met the rules.

April 1 is a significant date in both states: Under the Arkansas Works rules, the clock starts over each January, when people removed from the program can reapply and a new three-month countdown begins. So the next group of people to be cut off will be announced within a few weeks. This time, in a first, cutoffs may have included young adults, 19 to 29, for whom the rules have been phased in more slowly.

In legal briefs and court hearings, attorneys for both states and the U.S. Justice Department argued the requirements help ensure states can continue to afford the additional costs of their Medicaid expansions to include people with slightly higher incomes — less than 10 percent of total costs, with the federal government covering the rest. Kentucky, in particular, contended it could not otherwise afford its share of the program’s costs. The states also argued the work rules will lead people into jobs.

But at a court hearing earlier this month, the judge signaled his criiticism, , telling attorneys that neither the affordability of Medicaid’s expansion nor incentives to get jobs were at the core of the insurance program’s purpose.

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