Federal appeals court strikes down Medicaid work rules

A federal appeals court ruled Friday against the work requirements that some states have tried to impose on Medicaid enrollees who are not "medically frail" and had no dependents.

The Trump administration was arbitrary and capricious when it approved plans from Kentucky and Arkansas, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled unanimously.

The Department for Health and Human Services essentially ignored the main purpose of Medicaid, which “was to provide health-care coverage to populations that otherwise could not afford it,” wrote Senior Judge David Sentelle, who was appointed to the court by Ronald Reagan. The Trump administration is expected to ask the Supreme Court to hear the case.

The decision technically applies only to Arkansas, but "is sure to set a powerful precedent for other states," writes James Romoser of Inside Health Policy. "A few of those states have already been hit with lawsuits similar to the Arkansas litigation. Two states, Michigan and Utah, currently have active Medicaid work requirements, though penalties for non-compliance do not kick in until May 1 in both states. A lawsuit challenging the Michigan waiver is pending, as are similar lawsuits challenging waivers for Indiana and New Hampshire. Arizona, Indiana and Wisconsin all have paused the implementation of work requirement waivers. Ohio and South Carolina waivers are scheduled for future implementation."

The ruling upheld several by a judge in the D.C. District Court, which scuttled a program Arkansas had started and kept Kentucky's from taking effect. Democratic Gov. Andy Beshear, who defeated Republican Gov. Matt Bevin in the November election, rescinded Kentucky's plan soon after taking office in December. Republicans control the state legislature but have shown no interest in enacting Bevin's plan.

The plan had been challenged by 16 Medicaid beneficiaries in the state, who noted the Bevin administration's initial forecast that Kentucky Medicaid rolls would have 95,000 fewer people in five years than without the plan, in large measure because of noncompliance with the requirements to work, attend school or perform community service 80 hours a month and report monthly. "About 18,000 people in Arkansas lost coverage over seven months after the state’s work requirement commenced, according to the Center on Budget and Policy Priorities, a progressive think tank," report Brent Kendall and Stephanie Armour of The Wall Street Journal.

"Friday’s decision comes as some other states have shown mounting interest in adopting work requirements," they note. "Ten states including Kentucky, Arkansas, New Hampshire, Arizona and Michigan have received approval to adopt work requirements, according to George Washington University’s Milken Institute of Public Health.