Judges skeptical of Medicaid work requirements in appeals hearing on Kentucky, Arkansas programs

A panel of appellate judges was highly skeptical of the Trump administration’s argument that Medicaid work requirements meet the objectives of Medicaid, signaling a possible new legal defeat for the administration.

The three-judge panel on the U.S. Court of Appeals for the District of Columbia heard oral arguments Friday on a lower court’s ruling to strike down work requirements in Arkansas and Kentucky for Medicaid expansion beneficiaries. The same lower court also struck down similar requirements in New Hampshire.

The judges were highly skeptical that the work requirements meet the Medicaid law’s objectives of extending coverage to low-income people.

But the Department of Justice (DOJ) argued that the work requirements are similar to requirements for the Supplemental Nutritional Assistance Program and other welfare programs. However, Judge David Sentelle said those requirements were added by Congress to the statute and that Congress decided not to do the same thing for Medicaid.

“Those are statutory conditions there,” he said.

Judge Harry Edwards added that the waivers for the requirements approved by the Centers for Medicare & Medicaid Services (CMS) don’t appear to address the “real effects on coverage” of the Medicaid population.

DOJ attorney Alisa Klein argued the goal of the work requirements for the expansion population is to transition people off Medicaid into private employer or Affordable Care Act exchange coverage.

This will work to ensure the sustainability of the Medicaid program, which she said operates on “scarce resources.”

Klein pushed back when asked by Sentelle whether the goal of the work requirements, which call for able-bodied beneficiaries to work, volunteer or get training for 20 hours in some states, is to expand insurance coverage.

“In the long term, the answer is hopefully yes, but in the near term that is not our argument,” Klein said.

The hearing focused on lawsuits challenging the work requirements for Kentucky and Arkansas. In Arkansas, a total of 17,000 people lost coverage on Medicaid when the requirements first went online.

Klein said that the loss in coverage is due to “rollout problems.” However, Klein refused to say whether there was an estimated coverage loss that would prompt the Department of Health and Human Services (HHS) to pull the work requirements program for a state.

But Ian Gershengorn, an attorney arguing on behalf of the plaintiffs, the National Health Law program and the Southern Poverty Law Center, said the work requirements are part of “an effort to restructure Medicaid” by HHS.

The administration is trying to do a job that must only be done by Congress, he added.

The appellate judges will render a decision in the near future. The court could decide to uphold or strike down the lower court’s ruling. If the court does uphold the lower court, the DOJ could appeal for another hearing before the full circuit or appeal to the Supreme Court.

CMS has approved as of Oct. 9 waivers from six other states to implement work requirements: Indiana, Wisconsin, Utah, Arizona, Michigan and Ohio, according to data from Kaiser Family Foundation. Of those six states, only Indiana has implemented the requirements. 

Another nine states have waiver applications pending before CMS.