Federal judge strikes down Medicaid work requirements in Kentucky, Arkansas

Medicaid
A federal judge has blocked Kentucky's work requirements for a second time. (Getty/designer491)

A federal judge has struck down Medicaid work requirements in Kentucky and Arkansas.

In two separate opinions, Judge James Boasberg said that the Trump administration failed to consider whether the work requirements met the central goal of Medicaid, which is to furnish medical assistance to low-income people. This is the second time Boasberg has struck down Kentucky's program, called Kentucky HEALTH, on such grounds.

"Rather than adequately addressing Kentucky HEALTH’s potential to cause loss of medical coverage, the secretary continues to press his contention that the program promotes his alternative proposed objectives of beneficiary health, financial independence and the fiscal sustainability of Medicaid," Boasberg said in the 48-page opinion (PDF) in the Kentucky case.

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Two of those three goals are not, on their own, objectives of Medicaid, Boasberg said. The Department of Health and Human Services' "failure once again to adequately consider the effects of Kentucky HEALTH on coverage is alone … fatal to the approval," he ruled.

RELATED: Lawsuit challenges New Hampshire's Medicaid work requirements

Boasberg noted in his 36-page opinion (PDF) on Arkansas that his first ruling on Kentucky last summer failed to "cure" the deficiencies in the administration's approval of such programs.

Arkansas is the only state of eight where work requirements have been approved to fully roll out such a program. HHS argued that blocking the requirements when they've already been implemented would be disruptive, and while Boasberg said he "does not take lightly" those impacts, he disagreed.

"While such concerns are not insignificant, they are tempered in the context of this case," he said.

The Kaiser Family Foundation estimated that more than 18,000 people lost Medicaid coverage in Arkansas between June and December of last year, and found little evidence that these people left the program because they became covered through their employers.

Instead, it found that 94% lost coverage due to an administrative error, such a notice that was mailed to an incorrect address. KFF said that just 8% of those who were culled from the rolls have since reapplied.

RELATED: The 4 biggest Medicaid controversies in 2018

As these legal challenges have unfolded, the Centers for Medicare & Medicaid Services has continued to approve section 1115 waivers requesting work requirements, most recently earlier this month in Ohio.

In a statement, CMS Administrator Seema Verma said the ruling hasn't deterred the agency from offering states avenues to greater flexibility in Medicaid.

"We will continue to defend our efforts to give states greater flexibility to help low-income Americans rise out of poverty," Verma said. "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 hit back at critics of the work requirements in a blog post published alongside new guidance aimed at better monitoring their effectiveness, saying previous administrations frequently "rebuffed" state efforts to try new things in Medicaid. 

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