Federal Judge Blocks Medicaid Work Requirement In Arkansas & Kentucky

Henrietta Brewer
March 31, 2019

The states had mandated that Medicaid recipients show that they were working, engaging in volunteer activities, or enrolled in educational programs, through online forms filed periodically. Kentucky's rules were projected to remove up to 95,000 people from Medicaid.

A federal judge on Wednesday struck down Medicaid work requirements in Arkansas and Kentucky that forced most Medicaid recipients to work at least 80 hours per month in order to receive healthcare coverage, saying the requirements directly oppose the program's core objective of providing care to those in need.

HHS already permitted six other states to implement work requirements.

"The effect of Judge Boasberg's order is that the work and community engagement requirements can not be enforced, and Arkansas must provide three months of retroactive coverage instead of the one month allowed under the Arkansas Works approval". Similar rules are in effect in IN and New Hampshire.

Boasberg ordered an immediate halt to Arkansas' work requirement program, which went into effect past year and has already resulted in more than 18,000 Medicaid expansion enrollees being dropped from the program for non-compliance with the work and reporting requirements. Requests from seven others are pending. She has claimed that denying low-income people health coverage is actually good for them, insisting that "it is not compassionate to trap people on government programs or create greater dependency on public assistance".

But at a court hearing earlier this month, the judge foreshadowed his decision, telling attorneys that neither the affordability of Medicaid's expansion nor incentives to get jobs were at the core of the insurance program's objective.

Kentucky Gov. Matt Bevin has warned that he will stop participating in the Medicaid expansion to save money if the work rules are not approved. "We're thrilled people are going to keep coverage".

The GOP leader of the Arkansas Senate said he doesn't believe the ruling jeopardizes the future of Medicaid expansion, which covers more than 200,000 residents. But he stopped short of deciding the central question of whether work requirements are incompatible with Medicaid, a federal-state program that traditionally allows states broad leeway to set benefits and eligibility. Maine's new Democratic governor terminated that state's work requirement waiver.

Kentucky's waiver-which also includes premium payments, an end to 90-day retrospective coverage, and an end to non-emergency medical transportation-has not yet taken effect. Bevin said the state will appeal the ruling.

DeWine has described the OH rules as a possible model for other states. Hospitals in some states that have proposed work requirements could lose more than 20% of Medicaid revenue per hospital, according to the report, as well as seeing massive rises in uncompensated care costs. Arizona's work requirements are scheduled to begin no sooner than next January, she said. And one idea that a lot of states tried to embrace is that people should work or be looking for a job or be doing volunteer work if they want to receive government benefits.

In Kentucky, expansion supporters fear Bevin will react to the ruling by either trying to end the expansion or by cutting benefits, which he did temporarily after Judge Boasberg first blocked the waiver a year ago. "The Secretary could then always approve those waivers, no matter how few people remain on Medicaid thereafter because any waiver would be coverage promoting compared to a world in which the state offers no coverage at all".

In Arkansas, thousands of adults failed to tell the state their work status for three consecutive months, which led to disenrollment.

A new report from The Commonwealth Fund found that work requirements would leave hospitals with lower revenues, higher levels of uncompensated care and, consequently, even tighter operating margins.

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