The first-in-the-nation policy would apply to adults without disabilities, with some exceptions, and would require that Medicaid enrollees be employed, searching for a job, enrolled in school or participating in “community engagement” activities like volunteering in order to qualify for coverage.
In his decision, U.S. District Judge James Boasberg ruled that the secretary of the U.S. Department of Health and Human Services overstepped the bounds of the federal laws governing Medicaid when HHS approved Kentucky’s application for work requirements and other changes to the program.
“Although the secretary is afforded significant deference in his approval of pilot projects like Kentucky’s, his discretion does not insulate him entirely from judicial review. Such review reveals that 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 wrote. “This signal omission renders his determination arbitrary and capricious. The Court, consequently, will vacate the approval of Kentucky’s project and remand the matter to HHS for further review.”
Boasberg, who sits on the U.S. District Court for the District of Columbia, heard oral arguments in the case on June 15. While his ruling applies only to Kentucky’s Medicaid program, it could set a precedent for legal challenges to work requirements in other states.
“Today’s decision is disappointing,” Seema Verma, administrator of the federal Centers for Medicare and Medicaid Services (CMS), said in a statement. “States are the laboratories of democracy and numerous administrations have looked to them to develop and test reforms that have advanced the objectives of the Medicaid program. The Trump Administration is no different. We are conferring with the Department of Justice to chart a path forward.”
Adam Meier, secretary of the Kentucky Cabinet for Health and Family Services, said in a statement, “We look forward to working with CMS to quickly resolve the single issue raised by the Court so that we can move forward with Kentucky HEALTH. Without prompt implementation of Kentucky HEALTH, we will have no choice but to make significant benefit reductions.”
Bevin has threatened to end the entire Medicaid expansion implemented by his predecessor, then-Gov. Steve Beshear (D), under the Affordable Care Act if the work requirements and other elements of Bevin’s plan aren’t put in place. Ending Medicaid expansion would reverse the dramatic decline in Kentucky’s uninsured rate and cause more than 460,000 people to lose coverage.
But that drastic step isn’t imminent because the governor also previously said he would exhaust his legal options first. In other words, the judge’s decision is likely to be appealed.
“That is not typically a lightning process,” Boasberg wrote in his opinion, noting that the Medicaid expansion will remain in force until all legal avenues have been pursued.
Unlike other government benefits such as food and cash assistance, Medicaid has never before come with work requirements. That began to shift in January when President Donald Trump’s administration invited states to apply for federal approval to make unprecedented changes to the program.
The plaintiffs in the Kentucky lawsuit include 15 Medicaid beneficiaries, the National Health Law Program, the Kentucky Equal Justice Center and the Southern Poverty Law Center. They argued that work requirements are incompatible with Medicaid’s statutory mandate to provide coverage and improve health.
“There is a reason why no previous administration has approved the severe provisions Kentucky is so bent on pressing ― they do not furnish health care services. Instead they punish the very populations Medicaid is intended to protect,” said Catherine McKee, senior attorney at the National Health Law Program, in a press release issued after the judge’s ruling.
The Trump administration, the defendant in the lawsuit, maintains that promoting work also promotes health, making work requirements an appropriate use of Medicaid ― an assertion largely unsupported by the available evidence.
Boasberg was unpersuaded by that argument, or by much of what the Trump administration asserted in defense of work requirements, calling its contentions “little more than a sleight of hand.” Moreover, he blasted the Department of Health and Human Services for failing to undertake an assessment of the effects of Kentucky’s plan.
“At bottom, the record shows that 95,000 people would lose Medicaid coverage, and yet the secretary paid no attention to that deprivation,” Boasberg wrote. “Nor did he address how Kentucky HEALTH would otherwise help ‘furnish ... medical assistance.’ In other words, he glossed over ‘the impact of the state’s project’ on the individuals whom Medicaid ‘was enacted to protect.’”
The evidence suggests that work requirements are largely a solution in search of a problem.
Just 6 percent of the adults currently covered by Medicaid across the country either aren’t working or wouldn’t qualify for exemptions from the work requirements proposed by the Trump administration, according to the Henry J. Kaiser Family Foundation.
More than 60 percent of adults with Medicaid already work. Most of the remainder would fail under exemptions to the proposed work requirements because, for example, they’re “medically frail” or serve as a full-time caregiver to children. Kids, pregnant women, the elderly and people with disabilities are completely exempt from the work requirements.
Under the plans approved for Kentucky and other states, however, nearly all working-age adults without disabilities would still have to prove they’re working or meeting the alternate requirements for 80 hours a month. This bureaucratic hurdle would create significant new costs for states and serious burdens for the low-income people who use Medicaid, who would be at risk of losing coverage if they failed to report their work hours to the states.
If work requirements were in force nationwide, as many as 4 million people would lose Medicaid coverage, the Kaiser Family Foundation projects.
In Kentucky, the work requirement eventually would apply to about 200,000 people, while more than twice as many would face monthly premiums.
Nearly 1.3 million Kentuckians are enrolled in Medicaid or the Children’s Health Insurance Program, according to the Kaiser Family Foundation. The state projects that making Bevin’s reforms but otherwise preserving Medicaid expansion would cause 95,000 Kentuckians to lose coverage.
Federal authorities have greenlit work requirements in Arkansas, Indiana, Kentucky and New Hampshire, while applications are pending from Arizona, Kansas, Maine, Mississippi, Ohio, Utah and Wisconsin.
Virginia Gov. Ralph Northam (D) signed legislation in June to enact Medicaid expansion with a work requirement, but the state hasn’t yet submitted its request to the federal government. Michigan Gov. Rick Snyder (R) signed a bill in June to add work requirements to his state’s program and will submit an application to the federal government. Still more states are considering imposing work requirements.
This article has been updated with additional excerpts from the court’s decision and with comments from the plaintiffs, CMS chief Seema Verma and Kentucky health official Adam Meier.