WASHINGTON — The Trump administration’s efforts to push the poor toward self-sufficiency were dealt a blow Wednesday, when a federal judge ruled that Medicaid work requirements undermined the program’s mission of providing health care for the needy.
U.S. District Judge James E. Boasberg in Washington, D.C., blocked work requirements for low-income people in two states — Arkansas and Kentucky. He found that the states’ requirements pose numerous obstacles to getting health care that have gone unresolved by federal and state officials.
Boasberg sent the federal Health and Human Services Department back to the drawing board. But he stopped short of deciding the central question of whether work requirements are incompatible with Medicaid, a federal-state program that traditionally allows states broad leeway to set benefits and eligibility.
HHS approval of the Arkansas work requirement was “arbitrary and capricious because it did not address…whether and how the project would implicate the ‘core’ objective of Medicaid: the provision of medical coverage to the needy,” wrote Boasberg. The judge used similar language in his ruling on Kentucky.
Work requirements are already in effect in Arkansas, but Kentucky’s program has been on hold because of lawsuits. Both states want “able-bodied” adults who get health insurance through the Affordable Care Act’s Medicaid expansion to work, study, volunteer, or participate in “community engagement” activities.
About 6 in 10 adults on Medicaid already work in low-wage jobs, according to the nonpartisan Kaiser Family Foundation. Most of those not working cite reasons such as poor health, caring for an elder or child, or going to school.
Kentucky Gov. Matt Bevin quickly said his state would appeal. Bevin, a Republican, has threatened to end Kentucky’s Medicaid expansion covering more than 400,000 people if work requirements are ultimately struck down.
“We have one guy in Washington who thinks he owns Kentucky,” said Bevin, apparently referring to the judge. “We’re right, and we’ll be right in the end. And one guy can gum up the works if he wants, for a while, but this, too, shall pass.”
Arkansas Gov. Asa Hutchinson, also a Republican, said he was disappointed by the decision and would publicly address it at a news conference at 11 a.m. Thursday.
News of the ruling came shortly after the Arkansas Senate approved legislation keeping the Medicaid expansion program another year. The Senate approved the budget bill for Medicaid and the expansion by a 27-4 vote. The measure now heads to the House, where it will need at least 75 votes.
The GOP leader of the state Senate said he doesn’t believe the ruling jeopardizes the future of expansion, which covers more than 200,000 residents. About 18,000 have lost coverage as a result of the work requirements.
“I don’t think there’s any reason for the state to panic,” said Senate President Jim Hendren, who’s also the governor’s nephew. “This is another obstacle in our path to try to do the best we can in Arkansas with the chips the federal government and the judiciary gives us.”
Advocates for the poor say that Medicaid is a health care program and that work requirements have no place in it.
“It is nonsensical and illegal to add obstacles to Medicaid for large groups of individuals who are already working, or full-time health care providers for family members, or suffering chronic health matters,” said Jane Perkins, legal director of the National Health Law Program, a nonprofit that sued the government.
“Work should not be a key to health care access.”
More than 18,000 people lost coverage last year in Arkansas because of the state’s work requirement, which only applies to its expansion program and not regular Medicaid. Those who lost coverage could re-apply for the program in January. More than 6,400 people were at risk of losing their coverage by April if they didn’t comply with the requirement to work 80 hours a month.
Those who fail to comply three months in a calendar are kicked off the program and can’t regain coverage until the next year. About half of the nearly 234,000 people on the state’s Medicaid expansion were subject to the work requirement last month.
“This policy was designed to make it harder for low-income Arkansans to keep coverage, and unfortunately it was very successful while it was in place,” said Rich Huddleston, executive director of Arkansas Advocates for Children and Families.
Arkansas’ expansion program, which uses federal and state funds to purchase private insurance for low-income residents, has sharply divided the majority-Republican Legislature since it was created in 2013. Before Wednesday’s ruling, some Republican lawmakers urged colleagues to hold off on taking up the program’s budget until the case was resolved.
“(The work requirement) is the thing that’s made it where I’m ok with Medicaid expansion, where I can at least vote for it,” said Republican Sen. Bob Ballinger, who voted against the budget bill. “That kind of thing is exactly the kind of thing that would make me say we need to stop. We don’t need to move this forward.”
Republican House Speaker Matthew Shepherd said he’ll review the ruling and talk with Hutchinson, legislative leaders and the Department of Human Services to determine if any changes should be considered in how the House proceeds on the budget measure.
Trump and the Work Requirement
There was no immediate reaction from the Trump administration, which supports work requirements for public programs across the government.
Last year, President Donald Trump signed an executive order directing Cabinet agencies to add or strengthen work requirements for programs including subsidized housing, food stamps and cash welfare. HHS had already acted. Early in the administration, top officials invited states to apply for waivers that would allow Medicaid work requirements. Officials said they believed work was important to improving the health and well-being of Medicaid recipients.
Eight states have had their requests approved, though not all have put their programs in place, according to the Kaiser Family Foundation. Requests from seven others are pending. In one of those states, Virginia, a work requirement was key to getting the legislature to approve Medicaid expansion.
Nationally, some 12 million people are covered by the Medicaid expansion, a key component of former President Barack Obama’s health care law, adopted by 37 states. Officials in GOP-led states have argued that work requirements and other measures such as modest premiums are needed to ensure political acceptance for the expansion.
Overall, Medicaid is the government’s largest health insurance program, covering about 1 in 5 Americans, ranging from many pregnant women and infants, to severely disabled people and elderly nursing home residents.
Boasberg was nominated to the federal bench by Obama.
— Andrew Demillo reported from Little Rock
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