Court Strikes Down Trump Administration’s Medicaid Work Requirements

Michael Rainey

A federal appeals court on Friday struck down the Trump administration’s approval of work requirements in the Arkansas Medicaid program, delivering a serious blow to the effort to impose more stringent rules for participation in the country’s primary health care program for the poor.

Upholding a lower court decision, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled unanimously that the Department of Health and Human Services lacked the authority to approve work requirements, and that Trump administration officials had been “arbitrary and capricious” in allowing Arkansas to impose such requirements two years ago. The opinion was written by Senior U.S. Circuit Judge David B. Sentelle, a Reagan appointee.

Arkansas was the first state to receive permission to deploy Medicaid work requirements, which oblige aid recipients to work, volunteer or attend school for a certain number of hours each month in order to remain in the program. The Trump administration has now approved work requirements in 10 states, some of which have paused their efforts pending litigation. Nine other states are seeking approval.

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The court found that the Trump administration disregarded the purpose of Medicaid: The court affirmed that the primary purpose of Medicaid is to provide medical care to the needy, saying that it “is indisputably correct that the principal objective of Medicaid is providing health care coverage.” When it comes to making changes in the program, the court said that the secretary of Health and Human Services “is guided by the statutory directive that the demonstration must be ‘likely to assist in promoting the objectives’ of Medicaid.”

The Trump administration has attempted to justify the work requirements by referring to an alternative set of objectives, arguing that they would help people become healthier and financially independent. The court said those goals “are not consistent with Medicaid” and declared that the “text of the statute includes one primary purpose, which is providing health care coverage without any restriction geared to healthy outcomes, financial independence or transition to commercial coverage.”

The court said the work requirements have harmed recipients: “The record shows that the Arkansas Works amendments resulted in significant coverage loss,” Judge Sentelle wrote. “In Arkansas, more than 18,000 people (about 25% of those subject to the work requirement) lost coverage as a result of the project in just five months.”

The court criticized the Trump administration’s decision-making process: The judges were critical of Trump administration health care officials, including the HHS secretary, finding that they had failed to consider the potential loss in medical coverage that would result from the work requirements, despite warnings about such losses that emerged in comments during the public review process.

“Failure to consider whether the project will result in coverage loss is arbitrary and capricious,” Sentelle said. “In total, the Secretary’s analysis of the substantial and important problem is to note the concerns of others and dismiss those concerns in a handful of conclusory sentences. Nodding to concerns raised by commenters only to dismiss them in a conclusory manner is not the hallmark of reasoned decisionmaking,” the ruling says.

Critics claim a decisive victory: Critics of work requirements for recipients of public aid have long held that such efforts are thinly veiled attempts to prevent needy people from getting help they are legally entitled to receive. Sam Brooke, deputy legal director of the Southern Poverty Law Center, which challenged the work rules, said the “court confirmed that this administration’s effort to ‘explode’ Medicaid by converting it from a health care access program to a work program is arbitrary and illegal.”

What comes next: Nicholas Bagley, a law professor at the University of Michigan, said he expects all efforts to enforce state-level Medicaid work requirements to be suspended unless and until the Supreme Court reviews the case. “The Trump administration will probably appeal this decision to the Supreme Court, but it's hard to make a case for special urgency, especially since it's trying to slow-roll the constitutional challenge to the [Affordable Care Act],” Bagley wrote Friday. “So if the Supreme Court agrees to hear the case -- and I think it probably will -- we're talking about an argument sometime in the fall or winter, followed by a decision in late spring of 2021.”

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