Judge Blocks Kentucky Medicaid Work Requirement

In a blow to the administrations of President Donald Trump and Gov. Matt Bevin, a federal judge blocked Kentucky’s Medicaid work requirement on June 29, 2018, just days before the requirement was to take effect on July 1. In retaliation, Bevin canceled Medicaid vision and dental benefits, affecting nearly 500,000 Medicaid beneficiaries in the state.

In his ruling, U.S. District Judge James Boasberg expressed concern over the fact thousands would be losing coverage due to the proposed requirements. Boasberg made it clear to Kentucky officials that he views Medicaid as a means of increasing access to healthcare, not as a welfare benefit that people are taking advantage of.  Boasberg said the decision to approve the Kentucky HEALTH program without considering the impact it would have on beneficiaries’ ability to access healthcare services was “arbitrary and capricious.”

It was projected there would be 238,000 fewer member-months during the first year of the waiver, increasing to more than 1 million fewer member-months during the fifth year of the waiver (Kentucky HEALTH Waiver Modification).

Kentucky was the first state to have a Medicaid work requirement approved. So far in 2018, three other states—Indiana, Arkansas, and New Hampshire—also have had work requirements approved. And Boasberg’s ruling does not mean those states also will have their requirements blocked. In addition, seven other states are seeking work requirement waivers from the Centers for Medicare & Medicaid Services.

Kentucky HEALTH requires non-exempt adult Medicaid beneficiaries ages 19–64 to participate in work activities 80 hours per month. Work activities include employment, education, job skills training, receiving substance use disorder treatment, and community service. Exempt populations are former foster care youth, pregnant women, primary caregivers of a dependent, medically frail individuals, those diagnosed with acute medical conditions that prevent them from working, and full-time students.

The work requirement is not all that Kentucky HEALTH would change. It also requires beneficiaries to pay premiums of up to 4 percent of household income and includes multiple lockout periods for certain beneficiaries who do not comply with the new terms.

Before the ruling, Bevin had threatened to end Kentucky’s expansion of Medicaid under the Affordable Care Act if work requirements were not approved. His move to cancel dental and vision benefits for thousands of Medicaid beneficiaries shows that he means it.

The ruling is expected to be appealed, however, so this matter is far from over.

Joyce Caruthers is a senior analyst for Decision Resources Group whose work appears in Health Plan Analysis and Market Overviews.