Appeals court strikes down Arkansas Medicaid work requirement

February 19, 2020

The three-judge panel found HHS Secretary Alexander Azar’s approval of the requirement to be “arbitrary and capricious.”

The state of Medicaid work requirements is in limbo after an appellate court struck down Arkansas’ provision in a Feb. 14 decision.

The provision required those seeking Medicaid coverage between the ages of 19 and 49 to “work or engage in specified educational, job training, or job search activities for at least 80

hours per month” unless they show that they are medically frail, pregnant, caring for a dependent child under 6, participating in substance treatment, or are full-time students. It also did away with retroactive coverage, limited Medicaid to those who earn 100 percent or below of the federal poverty line, and removed a program in which the state used Medicaid funds to help pay residents’ premiums for employer-provided healthcare coverage, according to the opinion.

These changes required a waiver from HHS Secretary Alexander Azar, which he approved in March 2018 without the change in poverty level and rather than eliminating retroactive coverage curtailing it to only 30 days.

In approving the waiver, Azar wrote that the program would “assist in promoting the objectives of Medicaid,” by improving health outcomes, addressing behavioral and social factors that affect health, and incentivize “beneficiaries to engage in their own healthcare and achieve better health outcomes.”

The requirements took effect in July 2018, and by December of that year, 18,000 people had been stricken from the Medicaid rolls due to the new requirement, National Public Radio reported.

Residents filed a lawsuit against Azar leading a district court judge to vacate Azar’s approval ruling that HHS failed to engage the possibility that coverage would be lost due to the requirements. This effectively halted the program.

The appeals court upheld this opinion after the Trump administration argued the courts had no jurisdiction to review Azar’s waiver.

Arkansas isn’t the only state to lose in court when it comes to requiring work for Medicaid; Kentucky lost a similar court battle and later rescinded the law. In total, the Trump administration has granted 10 such waivers to states, but Arkansas was the only one to put those rules into effect, according to a report from The New York Times.

The Arkansas case has been watched by other states seeking to implement their own work requirements, but with this defeat, the Times says it is unlikely than any states will be able to implement them before the November general election.