Medicaid lawsuits headed to D.C. appellate court

Two lawsuits similar to the one filed against Indiana’s plan to impose new restrictions and work requirements on Medicaid recipients are scheduled for oral arguments Friday in the U.S. Court of Appeals for the District of Columbia.

The cases – Stewart v. Azar, 1:18-cv-00152, and Gresham v. Azar, 1:18-cv-01900 – challenge the new requirements instituted in Kentucky and Arkansas, respectively, in response to the expansion of Medicaid under the Patient Protection and Affordable Care Act. Judge James Boasberg of the U.S. District Court for the District of Columbia issued a pair of rulings in March 2019, striking down the Kentucky and Arkansas programs.

Kentucky and Arkansas imposed new restrictions after the Trump administration invited states to apply for waivers that would allow them to change the eligibility standards. Primarily, the tightened standards targeted those “able-body adults” who qualified for Medicaid as part of the ACA expansion of the federal healthcare program.

The National Health Law Program filed separate complaints in response to the Kentucky and Arkansas initiatives, asserting the new requirements violated the Administrative Procedures Act and the Take Care Clause, Article II, Section 3, Clause 5 of the Constitution. The named defendants are all federal agencies and officials including Hoosiers Alex Azar II, U.S. Secretary of Health and Human Services, and Seema Verma, administrator of the Centers for Medicare & Medicaid Services.

Joined by Indiana Legal Services, the National Health Law Program filed its complaint against Indiana’s new Medicaid requirements in September.

Kentucky HEALTH implemented six features as part of its waiver program, including the requirement that certain Medicaid recipients spent at least 80 hours per month working or participating in job training or community service. In addition, the new mandates eliminated the three-month period of retroactive eligibility for benefits, imposed monthly premiums, and denied coverage for up to six months to certain beneficiaries who failed to pay the premiums.

The Arkansas Works Amendment lowered income eligibility for the expansion population to those with household incomes to 100% of the Federal Poverty Level. Also, similar to Kentucky, Arkansas required 80 hours each month be spent at work or on a qualifying activity and eliminated retroactive health coverage.

According to court documents, more than 16,900 lost Medicaid coverage in Arkansas as a result of the new requirements and an estimated 95,000 in Kentucky would leave the Medicaid rolls in five years.

Boasberg found both the Kentucky and Arkansas restrictions to be “arbitrary and capricious” because neither program considered whether the new initiatives would help the state provide medical assistance to its needy citizens.

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