Trump admin’s Medicaid work requirements struck down by appeals court

By | February 16, 2020

Dive Brief:

  • A federal appeals court Friday unanimously ruled against Arkansas’ Medicaid work requirements, a signature policy pushed by President Donald Trump’s administration that ties eligibility to the public insurance program for the poor to work or job training.
  • The ruling will halt other work requirements implemented in other states beyond just Arkansas, according to University of Michigan health law expert Nicholas Bagley. “What does this all mean for work requirements? Unless and until the Supreme Court reviews the case, we can expect all work requirements nationwide to be halted,” he wrote Friday on Twitter.​
  • Advocates cheered the news. “It means that thousands of low-income people in Arkansas will maintain their health insurance coverage — coverage that enables them to live, work, and participate as fully as they can in their communities,” Jane Perkins, legal director at the National Health Law Program, said in a statement Friday. Her group helped represent the plaintiffs.

Dive Insight:

A three-judge panel ruled that HHS’ approval of Arkansas Medicaid work requirements was “arbitrary and capricious” and failed to further the objective of the Medicaid program, which is to provide healthcare coverage. 

The panel said a critical issue in the case is the loss of coverage among Arkansas enrollees and HHS Secretary Alex Azar’s dismissal of coverage loss concerns before approving the demonstration. Nearly a quarter of those subjected to the work requirement, or 18,000 people, lost coverage.

The Trump administration has encouraged states to apply for waivers to add the work rules.

Arkansas was not the only state to implement Medicaid work requirements and legal experts say this will stall the program in other states, including Indiana and Michigan.​

The appeals court ruling affirms a lower court ruling that also ruled against the policy and vacated HHS’ approval of the program in Arkansas and Kentucky. 

“The district court is indisputably correct that the principal objective of Medicaid is providing health care coverage,” Judge David B. Sentelle, nominated to his seat by President Ronald Reagan, wrote for the court. 

Instead of analyzing whether the proposal would promote the objective of Medicaid, Azar identified three alternative objectives, Sentelle wrote. Those three objectives are defined as improving health outcomes. 

“While furnishing health care coverage and better health outcomes may be connected goals, the text specifically addresses only coverage,” Sentelle wrote, adding that if Congress wanted those to be the objectives in the Medicaid program it would be included in the text of the law. 

At issue is how far states can deviate from the objectives of the Medicaid program when applying for a demonstration waiver. States can apply to the federal government to waive some of the requirements of the Medicaid program, so long as the pilot promotes the objectives of the Medicaid program. 

In 2017, Arkansas sought to tie Medicaid coverage to work or job training for at least 80 hours per month. HHS approved the waiver in the spring of 2018. 

Certain groups of enrollees were exempted from work requirements, including those that could show they were medically frail. However, residents who were not exempt were dropped from coverage if they failed to meet those work requirements and were not allowed to enroll again until the following year. 

The requirements were in full effect at the start of 2019 after a staggered implementation.

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