Approval of Medicaid work requirements sets stage for court battle

By Blogtrepreneur (Legal Gavel) [CC BY 2.0 ], via Wikimedia Commons

Another battle in court is brewing after the federal government decided to approve Kentucky’s Medicaid overhaul — Kentucky HEALTH — despite the state’s contentious work requirement for “able-bodied” adults.

The three groups that filed a lawsuit earlier this year, temporarily stopping Kentucky HEALTH’s main components from going forward, will return to federal court to launch another challenge of the state’s program.

“We will be in front of the same judge, with basically the same case,” Cara Stewart, a health law fellow with the Kentucky Equal Justice Center, said on Wednesday.

Along with the Southern Poverty Law Center and the National Health Law Program, the Kentucky Equal Justice Center filed a lawsuit in January on behalf of more than a dozen Medicaid recipients, who alleged that the approval was illegal and would jeopardize the health coverage of tens of thousands of people.

“We intend to pursue the next court challenge as vigorously as we have before when we won,” Southern Poverty Law Center Deputy Legal Director Samuel Brooke said in a news release Tuesday. “We have no reason to believe that the results will be any different this time.”

Their comments follow an announcement by the Kentucky Cabinet for Health and Family Services late Tuesday that the U.S. Centers for Medicare and Medicaid Services greenlighted the program to start next spring.

Those who are likely to be impacted by the Medicaid changes include more than 450,000 individuals who received medical assistance as a result of former Gov. Steve Beshear’s decision to expand Medicaid in Kentucky.

CMS said this week that Kentucky HEALTH will provide medical assistance in a manner that improves the “safety net” for such individuals.

“Kentucky has repeatedly stated that if it is unable to move forward with its Kentucky HEALTH demonstration project, it will discontinue coverage for the ACA (Affordable Care Act) expansion population, a choice it is entitled to make,” CMS said in its approval letter.

But “Kentucky expects that the reforms included in the demonstration will enable the Commonwealth to continue to offer Medicaid to the ACA expansion population.”

Kentucky HEALTH, also known as a Section 1115 waiver, will require some Medicaid recipients, ages 19 to 49, to work or perform other “community engagement” activities for 80 hours a month to keep their health coverage. There are exemptions for several groups, including pregnant women and survivors of domestic violence.

The plan — which includes various other features, such as premiums and non-eligibility periods — was approved for a five-year period, from April 1, 2019, to Sept. 30, 2023. The state estimated Tuesday that it will save in excess of $2 billion during that time, with more than $300 million in savings in general fund alone.

Kentucky House Democratic Leader Rocky Adkins, House Democratic Caucus Chair Dennis Keene and House Minority Whip Wilson Stone issued a statement Wednesday that criticized the Bevin administration for the plan.

“Our caucus sees remarkably little difference between the most recently approved Medicaid waiver and the one tossed this summer by a federal judge, so we first question why this administration thinks traveling the same route will lead to a different outcome,” the Democrats said in part. “We also find it odd that Governor Bevin sees nothing wrong in spending nearly $400 million in tax dollars to devise an unnecessary and complicated system whose only savings comes from removing health coverage from about 95,000 Kentuckians, nearly all of whom are already working in jobs that do not provide health insurance.”

In a June 29 ruling, U.S. District Judge James Boasberg sent Kentucky HEALTH back to the federal government for further review. He had decided that the Trump administration’s initial approval of the plan was arbitrary and capricious because it had failed to consider the plan’s impact on providing medical assistance.

“Nothing in the (November) approval appears to make it less arbitrary and capricious than the January approval which was struck down,” Stewart of the Kentucky Equal Justice Center said.

“Even if Judge Boasberg decides their approval is not arbitrary and capricious, that leaves several other complaints and the core substance of our objection, that Kentucky HEALTH fails to comply with the requirements of Section 1115 because it fails to promote the purposes of Medicaid,” she added.

In the approval of Kentucky HEALTH this week, CMS said the state’s plan “is likely to promote the objective of furnishing medical assistance because it provides coverage beyond what Kentucky is required to provide.”

The waiver’s features include a My Rewards account that requires certain participants to earn virtual dollars to access things like routine dental and vision benefits instead of giving it to them automatically.

“The over-the-counter medications, vision services, and dental services that can be accessed through the My Rewards Account are benefits that the Medicaid statute does not require states to cover,” CMS notes.

It also cites limited fitness services available through My Rewards and the coverage of “high-quality addiction services,” adding, “This new non-mandatory coverage for treatment of substance-use disorders is a matter of particular importance to Kentucky in light of the opioid crisis.”

Responding to the CMS approval, Bevin issued a statement on Twitter, saying that program is “essential to the long-term success of the state’s Medicaid program,” and its approval “ensures that the Commonwealth can continue to provide services for traditional Medicaid beneficiaries, while also offering a path toward improved health outcomes for all recipients.”

In the past, Bevin had threatened to end Medicaid expansion if a court prohibited any of the components of his Kentucky HEALTH plan from being implemented.


Written by Darla Carter. Cross-posted from
Insider Louisville via the Kentucky Press News Service.