Judge again blocks state's Medicaid plan with work requirements for many, says likewise for similar plan already in effect in Ark.

The order vacating federal approval of Kentucky's plan

By Melissa Patrick
Kentucky Health News

A federal judge in Washington has again blocked Gov. Matt Bevin's attempts to require many people on Medicaid to work or do other forms of "community engagement," saying that such rules don't square with Medicaid's objective to give low-income people health care.

U.S. District Judge James Boasberg also ruled March 27 against similar work requirements in Arkansas. Bevin, a Republican running for re-election, has said the U.S. Supreme Court will ultimately decide the issue. His former deputy chief of staff, Health and Family Services Secretary Adam Meier, said in a press release, "We believe that we have an excellent record for appeal and are currently considering next steps.”

The plan is called Kentucky HEALTH, for Helping to Engage and Achieve Long Term Health. It would require "able-bodied" Medicaid members to spend 80 hours a month working, going to school, taking job training, acting as a primary caregiver or getting treatment for drug abuse; make them report monthly; stop their coverage for failure to comply; and pay small premiums, based on income.

Boasberg vacated federal approval of the plan and sent it back to the U.S. Department of Health and Human Services for further review just days before it was set to launch on April 1 -- just like he did in late June, when he vacated it the first time. He said both times that HHS Secretary Alex Azar had not sufficiently considered the state's projection that its Medicaid rolls would have 95,000 fewer people in five years with the rules than without them, in large measure for failing to follow rules.

"Given a second failure to adequately consider one of Medicaid's central objectives, the court has some question about HHS's ability to cure the defects in the approval," Boasberg wrote. In Arkansas, more than 18,000 people have lost Medicaid coverage since a similar plan took effect there.

Kentucky made no real changes to its plan after Boasberg's ruling last June. However, it put more emphasis on its argument that without the new rules, Bevin would end his Democratic predecessor's expansion of Medicaid to about 450,000 people earning up to 138 percent of the federal poverty line -- many more than the forecast drop of 95,000 under his plan. The governor has issued an order ending the expansion six months after any final court decision against the plan.

The Medicaid expansion was authorized by the 2010 Patient Protection and Affordable Care Act, more often called Obamacare. The Supreme Court upheld the law in 2012 with one main exception: "Congress could not require states to adopt that Medicaid expansion by conditioning all their Medicaid funding on a decision to do so," noted Boasberg, an appointee of President Obama.

Judge James Boasberg of the District of Columbia

The high court "explained that the states could not be compelled to engage in a program they had not bargained for with 'a gun to the head.'  Kentucky, it seems, has now picked up that gun by threatening to de-expand Medicaid," Boasberg wrote.

"By definition, so this argument goes, any number of people covered by an experimental Medicaid program would be greater than the number if there were no Medicaid at all; as a result, any demonstration project that leaves any individual on a state’s Medicaid rolls promotes coverage. The court cannot concur that the Medicaid Act leaves the secretary so unconstrained, nor that the states are so armed to refashion the program Congress designed in any way they choose."

Meier replied, “The judge illogically concluded that Medicaid is all about paying for health care for as many people as possible without regard to whether this coverage actually makes people healthier. . . . We want more than to simply give someone a Medicaid card they can put in their wallet. We want a program that focuses on actually improving health outcomes. . . . Kentucky HEALTH is precisely in line with the objectives of the Medicaid program."

Meier said Kentucky HEALTH will no longer begin on April 1 and that beneficiaries will continue to have the same coverage and benefits that they currently have. Beneficiaries should contact their managed care organization or go to www.benefind.ky.gov for the most up-to-date information.

Boasberg's decision brought immediate praise from Obamacare supporters.

“Kentucky Voices for Health and our partners applaud the court’s decision to once again protect Kentuckians on Medicaid by refusing to create additional barriers to care,” said Executive Director Emily Beauregard. “Medicaid works in Kentucky, and Medicaid expansion has saved lives. Judge Boasberg’s decision sends the message that 1115 waivers must uphold the purpose of Medicaid, which is to furnish health coverage to low income people.” Kentucky HEALTH would be an experimental project under Section 1115 of the Social Security Act.

The state's slightly revised plan prompted 16 Kentucky Medicaid recipients to file an amended complaint to the original class-action lawsuit, saying nothing of substance was changed. They are represented by the National Health Law Program, the Kentucky Equal Justice Center and the Southern Poverty Law Center.

HHS's Centers for Medicare and Medicaid Services has approved waivers of the Medicaid rules to include work requirements in eight states, with seven applications pending, according to the Kaiser Family Foundation.  

The Foundation for a Healthy Kentucky struck a deal with the Bevin administration last year to help Medicaid members comply with the plan to keep their coverage. It issued a statement from President and CEO Ben Chandler saying, "The foundation recognizes that adequate health insurance coverage is one of the most cost-effective ways to improve health outcomes. For a state with some of the poorest rankings in health outcomes, coverage is critical to reduce health-care costs, particularly those costs paid by tax dollars, by increasing access to preventive services, improving medication adherence, and providing better treatment for chronic illnesses."

Chandler added, "The foundation is reviewing the court's opinion. Meanwhile, we are aware that some Kentuckians have already voluntarily taken advantage of the job training and placement services expanded under the Kentucky HEALTH framework. If the administration continues to provide the framework on a voluntary basis, the foundation plans to continue working with community organizations and other stakeholders to support Medicaid beneficiaries with accessing resources."