Circuit Court Upholds Decision to Strike Down Arkansas Medicaid Work Requirements
Last week, a federal appeals court unanimously upheld a lower court’s ruling that found work requirements for Medicaid enrollees in Arkansas do not advance the purpose of the health program, blocking the proposal in the state. Although the ruling applies only to Arkansas’s work requirements, it is likely to set a precedent for other legal challenges currently facing a slew of other states that have sought to implement similar proposals following guidance issued by the Trump Administration early last year. The National Council appreciates the work of fellow advocates standing against these harmful work requirements that make it harder for people with substance use disorders and mental illness to receive the care they need.
States are encouraged to tailor their Medicaid programs to address their residents’ unique challenges by creating demonstration programs via a mechanism called section 1115 waivers, which must first be approved by CMS before going into effect. Over the past three years, many states have submitted 1115 waivers, which have subsequently been approved by CMS, that would allow the states to require certain Medicaid recipients to report a number of hours per month of work or “community engagement” activities, such as volunteering or pursuing education, or risk losing their health coverage. Along the way, the Trump Administration has encouraged states to pursue these requirements despite ongoing legal challenges against them.
When Arkansas implemented its Medicaid work requirements in 2019, more than 18,000 people enrolled in the program (representing about one-quarter of the individuals subject to the new requirements) lost their health coverage in the first five months. These massive coverage losses were largely due to individuals failing to navigate the reporting requirements rather than failing to work the required number of hours. Some of the 18,000 people that lost coverage were likely exempt from the work requirements, but had difficulty navigating the new reporting systems or were unaware of their exemption status. The Arkansas work requirement proposal’s legal challenges had previously been paired with similar requirements in Kentucky, but Kentucky’s new Governor terminated the project rendering the legal case against the state moot.
The US Court of Appeals for the District of Columbia agreed this week that the primary objective of Medicaid is to provide access to medical coverage. CMS disregarded that objective and instead attempted to justify the work requirements on the grounds that they would promote beneficiaries’ overall health by helping them become financially independent. The court ruled that “failure to consider whether the project will result in coverage loss is arbitrary and capricious,” on the part of CMS, which continues the halt on implementation of the new requirements.
Now that Arkansas’s Medicaid work requirement proposal has been struck down in multiple appeals courts, the Trump Administration may seek to continue the legal fight in a reconsideration before the full D.C. Circuit, or can elevate the appeal to the Supreme Court. Stay tuned to Capitol Connector for updates on these ongoing legal challenges against harmful Medicaid work requirements.