What’s the Future of Medicaid Work Requirements After Court Ruling?

Contributor : Joyce Caruthers : Senior Analyst and Simrandeep Kaur : Associate Analyst

Publish date: 06 May, 2019

In a blow to the Trump administration’s goal for Medicaid recipients to “rise out of poverty and government dependence,” a federal judge blocked the Medicaid work requirements in Arkansas and Kentucky on March 27, 2019. In his ruling, Judge James E. Boasberg of the Federal District Court for the District of Columbia called the mandates “arbitrary and capricious.”

The story so far:

Arkansas’ work requirement was implemented in June 2018. Around 18,000 people in Arkansas lost Medicaid coverage in 2018 due to non-compliance. And this is the second time Boasberg has blocked Kentucky’s work requirement, which was to begin this summer. Boasberg first blocked the state’s Medicaid work requirement in June 2018. However, the Trump administration re-approved Kentucky’s work requirement in November 2018. In his second ruling on Kentucky’s work requirement, Boasberg said the plan was basically unchanged and that the Centers for Medicare & Medicaid Services did not consider the consequences for those who would lose Medicaid coverage.

As of April 2019, Arizona, Indiana, Ohio, Michigan, New Hampshire, Utah, and Wisconsin have had their work requirement waivers approved by CMS, while Alabama, Mississippi, Oklahoma, South Dakota, Tennessee, and Virginia have waivers pending before CMS.

What’s next?

Kentucky’s waiver included several other provisions, which cannot proceed because of Boasberg’s ruling. The other provisions required beneficiaries to pay premiums of up to 4 percent of household income and included multiple lockout periods for certain beneficiaries who do not comply with the new terms.

Meanwhile, New Hampshire’s work requirement faces similar legal challenges and was filed in the same court that heard the Kentucky and Arkansas cases. In Boasberg’s March 2019 ruling, each state’s waiver was evaluated individually, so the other states can move forward with their plans.

How will lawmakers respond?

After Boasberg’s most recent ruling, a state legislative committee in Iowa decided to abandon a Medicaid work requirement bill, and state lawmakers in Idaho added amendments to a bill that would impose work requirements on Medicaid beneficiaries.

Lawmakers in favor of Medicaid work requirements could dig their heels in if the courts do not rule in their favor—as Kentucky Gov. Matt Bevin initially did when he temporarily canceled dental and vision benefits for approximately 400,000 Medicaid beneficiaries when Boasberg blocked Kentucky’s work requirement in summer 2018. Bevin also has said he would end the state’s Medicaid expansion if the work requirement is overturned by the courts.

Kentucky and Arkansas can appeal the ruling, as can the Department of Health and Human Services, so this battle is far from over.

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