The Trump administration has reinstated permission for Kentucky to compel many of its low-income residents on Medicaid to work or prepare for a job, after a federal court had blocked the state’s ability to begin the requirements.
Federal health officials announced Tuesday night that they had, for a second time, approved Kentucky’s plan to impose “community engagement” requirements as part of Medicaid, saying they could start in April, nine months after they originally were to have taken effect.
Kentucky has been a lightning rod in the administration’s rewriting of the rules for the public health insurance system for poor Americans by inserting long-held conservative ideas – about individual responsibilty and a limited government helping hand – for the first time in the history of a program run jointly by the federal government and states that began under the War on Poverty of the 1960s.
In January, Seema Verma, administrator of the Department of Health and Human Services’ Centers for Medicare and Medicaid Services, decided that it would grant permission to states that wanted to created Medicaid work requirements. Kentucky quickly became the first to win approval. The move drew a swift lawsuit by opponents who contended that the change undermined the program’s central purpose because even state figures predicted that perhaps 95,000 people would lose coverage within five years because they had not complied.
The changes, a rallying cry by Kentucky’s Republican Gov. Matt Bevin, call for able-bodied adults on Medicaid to have a job for at least 80 hours per month or devote that amount of time to education, job training, or volunteer work. People who fail to show they were meeting the rules would be frozen out for six months.
In late June, days before the requirements were to have begun, U.S. District Judge James Boasberg, of the U.S. District Court for the District of Columbia, essentially agreed with the critics. He ruled that Kentucky could not move ahead with its plan because federal health officials had not adequately considered the requirement’s impact on the program’s central purpose – providing medical assistance to a state’s citizens.
The judge sent Kentucky’s plan back to HHS for further review.
The Trump administration did not appeal Boasberg’s ruling. Instead, CMS took the unusual step in July of reopening Kentucky’s proposal for another round of public comment.
In a statement Tuesday night, CMS spokesman Johnathan Monroe said that the agency “worked diligently to analyze and consider the comments received,” reaching the conclusion that Kentucky’s plan “is likely to promote the objectives of Medicaid.”
A lengthy approval letter, dated Tuesday, to Kentucky state officials makes clear that the version CMS just approved is substantially the same as the original with a few different nuances, such as a more explicit monitoring requirement about its effects.
The approval letter argues that Kentucky’s plan heeds Medicaid’s central purpose.
While the program is meant to promote access to insurance coverage, it says, “there is little intrinsic value in paying for services if those services are not advancing the health and wellness of the individual receiving them, or otherwise helping the individual attain independence.”
The letter also contends that, as some people leave the Medicaid rolls by gaining income and insurance through a job, “[s]uch measures may also preserve states’ ability to continue to provide the optional services and coverage” for those who still need the program.”
Cara Stewart, an attorney with the Kentucky Equal Justice Center, one of three organizations that lodged the lawsuit on behalf of 15 Kentuckians on Medicaid, said she was not surprised that the Trump administration had re-approved the state’s plan. But she said, “I’m shocked they didn’t change much at all.”
Because the court case is still open, Stewart said, the plaintiffs will update their filing and ask again that Kentucky’s work requirements be found illegal. “We are going to be asking for the same thing – that harm be prevented,” she said. “We’ll be in the same court, same judge, everything will be on repeat.”
A similar lawsuit is pending in Arkansas, which in June became the first state to put its work requirements into effect. About 12,000 poor Arkansas so far have lost their Medicaid eligibility as a result.
