Judge in Medicaid work-requirements case seems skeptical that state and feds have come up with a plan that fits the law

The judge who kept Kentucky from adding work requirements to Medicaid last year remained dubious of the plan in a hearing on the latest attempt Thursday.

Judge James Boasberg (Law.com photo)

U.S. District Judge James Boasberg of Washington, D.C., "cast a seemingly skeptical eye Thursday as Kentucky and Trump administration officials sought to defend requiring some recipients to find jobs, volunteer or lose their benefits," Lesley Clark reports for McClatchy Newspapers. Boasberg asked the lawyers "why he shouldn’t again strike down the initiative, and whether it meets Medicaid’s objective to provide medical care."

The latter point was key to Boasberg's ruling last June, which struck down the Department for Health and Human Services' approval of the plan that was to take effect days later. The latest one is scheduled to take effect April 1, and Boasberg said he would rule by then.

"He also heard a challenge to work requirements imposed by Arkansas that have led to an estimated 17,000 losing coverage," Clark reports. The two cases crossed paths when Justice Department lawyer James Burnham "said that Kentucky wouldn’t know how many people would lose coverage until they started the program, Boasberg pointed to the loss of coverage in Arkansas.

Kentucky officials have estimated that under their plan, state Medicaid rolls would have 95,000 fewer people in five years than without the plan, called Kentucky HEALTH, for "Helping to Engage and Achieve Long Term Health." (Frequent references to that many people losing coverage are not precise, because tens of thousands of people go on and off the program each month.)

In his ruling last June, Boasberg, an appointee of President Barack Obama, ruled that HHS Secretary Alex Azar “never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid.”

In both hearings, Boasberg questioned Burnham "on whether the work requirement plans approved by the Trump administration were helping to achieve Medicaid’s goal of promoting health coverage," Phil Galewitz reports for Kaiser Health News. "When Burnham argued that work requirements would give people incentives to find work and improve their lives, Boasberg interjected: 'That is not the purpose of Medicaid.' . . . Top health officials for the Trump administration have said getting people on Medicaid into jobs will make them healthier — which they call a key goal of the program."

Azar told the Senate Finance Committee Thursday that only 1,000 of those who lose coverage in Arkansas appealed, and “Only 1,452 of those 18,000 even reapplied for Medicaid when open enrollment came again.” He said that “seems a fairly strong indication” that the rest of those cut from the program “got a job and insurance elsewhere.”

In court, "Burnham argued neither Kentucky nor Arkansas was kicking people off their programs and causing them to lose benefits," Galewitz reports. "He said people were just choosing to not comply with the state’s new reporting requirements to show they were working, doing volunteer work or meeting one of the states’ exceptions."

"Boasberg questioned whether the state has proven its case to the federal government that it needs work requirements to keep its Medicaid program financially sustainable," Galewitz reports. Boasberg asked Burnham, “At the end of the day, isn’t the centerpiece of your case the fiscal sustainability argument?”

Republican Gov. Bevin has threatened to end his Democratic predecessor's expansion of Medicaid to people with incomes up to 138 percent of the federal poverty level "unless his state is allowed to proceed with the new rules, a move that would cause the more than 400,000 new enrollees to lose their coverage," Galewitz reports. "He said the work requirement will help move some adults off the program so the state has enough money to help others on the program."

Ian Gershengorn, an attorney for the National Health Law Program, representing 16 Kentucky Medicaid beneficiaries, said the sustainability argument “seems absurd” because the federal government this year is paying 94 percent of Medicaid expansion costs," Galewitz reports: "He said HHS should not be approving Kentucky’s waiver based on the governor threatening to kill the entire Medicaid expansion if he doesn’t get work-requirement authority."

Lawyers for Bevin and the Trump administration "argued that any flaws he identified were addressed and the state is ready to roll out" the plan, Clark reports. Gershengorn "dismissed the changes and said they’d still result in an unacceptable loss of coverage."

The state and Azar have “worked exhaustively to minimize coverage loss,” argued Deputy General Counsel Matthew Kuhn, who "sported a bright red pin scissors pin, a symbol of Bevin’s signature Red Tape Reduction Initiative, as he argued his case," Clark reports. "He said the changes would exempt thousands from the work requirements."

Clark notes, "Kentucky was the first of four states to win federal approval to impose a work requirement for Medicaid enrollees, and the case has national implications with other states moving quickly to impose similar restrictions."