Federal Judge Strikes Down Work Requirements for Medicaid Recipients


August 18, 2019

Federal Judge Strikes Down Work Requirements for Medicaid Recipients

U.S. District Judge James Boasberg blocked the state of Kentucky from requiring Medicaid recipients to work to retain benefits. Boasberg also discontinued the same requirements in Arkansas in his ruling. This is the second time in nine months that Boasberg has ruled against the work requirement. 

Arkansas Work Requirements

In March 2018, the U.S. Health and Human Services department (HHS) approved the “Arkansas Works Amendments” (AWA), which was designed to foster better health outcomes and personal independence. 

Since the AWA was implemented, 16,000 Arkansas residents have lost Medicaid coverage, leading to a federal lawsuit filed by 10 plaintiffs who were affected. Boasberg felt that the work requirements were “arbitrary and capricious.” He also found that it violated requirements set forth under the Affordable Care Act (ACA).

The Arkansas amendment reduces the income eligibility from 133 percent, as set by the ACA, to 100 percent of the federal poverty level. It also requires some recipients to find employment and eliminates retroactive health coverage. HHS approved the work requirements and retroactive insurance limitations, requiring most able-bodied adults between the ages of 19 and 49 to complete 80 hours of employment or other qualifying activities. Compliance was to be reported through an online portal each month. 

Medically frail enrollees, pregnant women, full-time students and those in drug or alcohol programs were exempt from the work requirements. Less than 1,700 of the 13,653 people who were required to comply did so as of the beginning of November 2018. Many of those who lost coverage due to non-compliance claimed they did not have access to online services to provide the report necessary to meet the requirements.

Kentucky Work Requirements

HHS approved the Kentucky HEALTH initiative in January 2018, an experimental project designed to transform the state’s Medicaid program. The main purpose of the change was to require able-bodied Medicaid recipients to obtain employment or perform community engagement projects in order to remain eligible. 

The courts determined that there were flaws in the program, including the number of people who could lose coverage under the new regulations. They denied the implementation of Kentucky HEALTH and the state revised the plan, which was approved by HHS in November 2018. 

A lawsuit filed in federal court argued that the program had not been functionally changed from the original program and that it should be dismissed a second time. Boasberg agreed, denying the implementation of the plan for the second time in nine months.

The second approval of Kentucky HEALTH required certain Medicare recipients to meet community engagement requirements, which may include employment, job training, education, community service or participation in a Substance Abuse Disorder Treatment program. In addition, monthly premiums could be based on income or the length of time enrolled. The program could “lock out” beneficiaries for up to six months who failed to meet requirements for premiums or reporting.

Trump Administration and Conservative States

The Trump administration has long supported work requirements for able-bodied Medicaid recipients. Kentucky Governor Matt Bevin has threatened to eliminate the Medicaid expansion, dropping more than 400,000 enrollees, if the state is unable to implement its new rules. It is the governor’s belief that the work requirement could move adults from the program so that there are additional funds to help others. 

Seema Verma, head of the Centers for Medicare and Medicaid Services (CMS), said that she would continue to approve work requirements. CMS feels that these measures give states greater flexibility to help low-income people climb out of poverty by allowing them to work or be trained in needed positions.

Statistics indicate that most Medicaid enrollees are already employed, looking for work or in school while others cannot work as they are caring for a loved one. The Trump administration and conservative states say they will continue to push for work requirements among able-bodied Medicaid recipients who currently have no barriers to obtaining employment despite the recent rulings.