Court Blocks Kentucky’s Medicaid Work Requirements

On June 29^th, a district court judge blocked Kentucky’s waiver request to require Medicaid enrollees to work or participate in a job-related activity for at least 80 hours per month or lose their health coverage. The court ruled that the Centers for Medicare and Medicaid Services (CMS) had not properly considered whether the initiative would violate Medicaid’s central objective of providing medical assistance to the state’s citizens. The decision could have broad implications for other states hoping to limit Medicaid enrollment through work requirements.

IMPLICATIONS

While Judge James Boasberg’s ruling applies only to Kentucky, his reasoning for overturning CMS’s decision to approve Kentucky’s work requirements could extend to the other states that have implemented work requirement programs — namely, Arkansas, Indiana, and New Hampshire — and seven other states whose applications are currently being reviewed by the Department of Health and Human Services (HHS). Matt Salo, Executive Director of the National Association of Medicaid Directors, said the ruling is a “big roadblock for the four states looking to implement these already approved waivers.”

Although the decision did not outlaw Medicaid work requirements outright, it requires that any Medicaid Section 1115 waiver demonstration be carefully assessed for its impact on people’s health care coverage. The decision also sets an important precedent by finding Medicaid to be a health insurance program that provides equal treatment of all groups covered by its statute, including Medicaid expansion populations.

WHAT’S NEXT?

HHS will now reevaluate Kentucky’s waiver approval and decide whether they will seek an appeal, which will need to be filed in the next 60 days. As a result, HHS may hold off on announcing any additional work requirement approvals — and states may wait to submit their requests — until this legal battle reaches its conclusion.

In the meantime, Kentucky Gov. Matt Bevin (R) has responded to the ruling by canceling Medicaid vision and dental benefits included in Kentucky HEALTH, and has threatened to reverse the state’s Medicaid expansion.