Federal judge again rejects Bevin’s Medicaid work requirements in Kentucky

A federal judge has once again struck down Gov. Matt Bevin’s tougher eligibility rules, such as work requirements and premiums, for several hundred thousand low-income people receiving health coverage through Kentucky’s Medicaid program. The new rules were set to take effect on Monday.

U.S. District Judge James Boasberg in Washington, D.C. rejected Bevin’s Kentucky HEALTH proposal and returned it to the U.S. Department of Health and Human Services for further consideration. States cannot refashion Medicaid “in any way they choose,” Boasberg wrote in an order handed down Wednesday. By law, Medicaid must promote health coverage for people, he said.

“As a consequence, once again finding the re-approval was both contrary to the (Affordable Care Act) and arbitrary and capricious, the court will vacate and remand to HHS for further review,” Boasberg wrote.

Bevin’s office did not immediately respond to a request seeking comment Wednesday.

Bevin repeatedly has threatened to terminate Kentucky’s expanded Medicaid program for more than 400,000 low-income adults if the courts prevent him from going forward with the tougher eligibility rules of Kentucky HEALTH. Boasberg referred to Bevin’s threat in his decision, writing: “Kentucky, it seems, has now picked up that gun by threatening to de-expand Medicaid.”

Sixteen Kentucky Medicaid recipients sued the federal government in January to prevent Bevin from adding 80-hour-a-month work, study or volunteer requirements; premiums; monthly reporting duties; and six-month coverage lock-out periods for failing to cooperate for able-bodied adults who are enrolled in the state’s $9.7 billion-a-year Medicaid program.

A similar group of plaintiffs successfully blocked Bevin’s Kentucky HEALTH proposal last summer. However, in November, the U.S. Centers for Medicare and Medicaid Services re-approved Bevin’s Medicaid waiver proposal with minor revisions — Boasberg called them “modest changes” Wednesday — prompting an amended lawsuit to be filed this year, again in Boasberg’s court.

In his decision, Boasberg said HHS erred by approving Kentucky HEALTH for reasons unrelated to the fundamental purpose of Medicaid, such as saving the state of Kentucky money and theorizing that people are healthier if they are forced to search for employment because a job will teach them “self-sufficiency.”

“The secretary (of HHS) does not weigh the benefits of their self-sufficiency against the consequences of coverage loss, which would harm and undermine the financial self-sufficiency of others,” Boasberg wrote. “These deficiencies render his determination arbitrary and capricious.”

Boasberg also faulted the government for not having any clear notion of how many Kentuckians could lose their coverage under Kentucky HEALTH. Critics have offered numbers ranging from 95,000, using the Bevin administration’s own estimates, to 297,500.

“Whatever the precise calculation, the number is undoubtedly substantial. While the secretary has now nominally acknowledged that (95,000) estimate, none of his responses evinces the kind of ‘reasoned decision-making’ that arbitrary-and-capricious review requires,” Boasberg wrote.

One of the groups representing the Medicaid recipients in court, the National Health Law Program, said Wednesday that Medicaid “is not and never has been a program intended to encourage work.”

“The law is about providing health care services to low-income individuals and families and under-served populations. It is nonsensical and illegal to add obstacles to Medicaid for large groups of individuals who are already working,” said NHLP legal director Jane Perkins.

Among the outside groupsp that filed briefs against Bevin’s plan in court were the American Medical Association, the American Psychiatric Association, the Catholic Health Association of the United States, the American Academy of Pediatrics, the American College of Physicians, AARP, the National Academy of Elder Law Attorneys, and the Disability Rights Education and Defense Fund.

In their briefs, the groups said tens of thousands of Kentuckians unfairly would be pushed out of Medicaid as the state charged premiums from people living near the poverty line; made them search for work or volunteer positions even in poor, rural communities where few opportunities exist; and required them regularly to report their shifting hours and wages to a state agency, or else be locked out of their coverage.

These critics have pointed to Arkansas, where 18,000 Medicaid recipients have lost their coverage since that state last year added work requirements and other rules similar to Bevin’s proposal, most of them without finding jobs. In a related ruling Wednesday, Boasberg also struck down Arkansas’ work requirements for Medicaid recipients.

More than 1.3 million Kentuckians were enrolled in Medicaid last fall, about 30 percent of the state’s population.

Insurance coverage for Kentuckians surged under the Affordable Care Act. The uninsured rate fell from 20.4 percent in 2013 to 7.8 percent in 2016, the nation’s biggest decline, according to the University of Louisville’s Commonwealth Institute of Kentucky. Most health researchers credit the decline to the decision by former Gov. Steve Beshear to expand Medicaid to Kentuckians living at or below 138 percent of the federal poverty level — many of them working but without employer-provided insurance.

Bevin, a Republican, was elected to succeed the Democratic Beshear in 2015.

Bevin has promoted Kentucky HEALTH by saying that able-bodied adults on Medicaid will be healthier if they are engaged in their communities as workers, volunteers or students, and if they contribute toward the cost of their care. Monthly premiums would begin at $1 to $15, eventually topping out at $37.50.

“This idea that we are somehow punishing people — that somehow this will be a detriment to people — I think is a huge, huge misunderstanding of what people need, the dignity and the respect that comes from giving people an opportunity,” Bevin told reporters last year.

The long-running battle over how Kentucky’s expanded Medicaid program should be managed might be made irrelevant by another looming courtroom fight.

This week, President Donald Trump’s administration filed paperwork in the U.S. 5th Circuit Court of Appeals arguing that the entire Affordable Care Act should be scrapped, including the section that allows states to expand their Medicaid programs to the working poor. If Trump and a coalition of Republican state leaders are successful in this case, an estimated 21 million Americans could lose their insurance, including those who receive federal subsidies for private plans and those covered by expanded Medicaid.

This story was originally published March 27, 2019 at 4:50 PM.