Three organizations opposing profound changes to Kentucky's Medicaid program filed a lawsuit Wednesday to block the nation's first experiment to compel low-income people to work or otherwise engage in their communities to qualify for the safety-net health insurance.
The federal lawsuit, lodged on behalf of 15 Kentuckians at risk of losing coverage and medical care, alleges that the federal health officials who approved the plan acted illegally and in conflict with Medicaid law that only Congress has power to change.
The 80-page complaint says that, in granting Kentucky a "waiver" from regular Medicaid rules, the Trump administration has "effectively rewritten the statute . . . overturning a half-century of administrative practice, and threatening irreparable harm to the health and welfare of the poorest and most vulnerable in our country."
The suit was filed by the National Health Law Program, the Kentucky Equal Justice Center and the Southern Poverty Law Center. Filed in U.S. District Court for the District of Columbia, it names as defendants the Department of Health and Human Services, its Centers for Medicare and Medicaid Services and top officials at both.
An HHS spokesman said the department would not comment on pending litigation. Kentucky state officials did not respond to requests for comment.
The litigation moves into the courts a philosophical divide that has been brewing for years. Conservatives have said that people receiving Medicaid should be required to fulfill certain obligations like their counterparts on welfare and food stamps and that such activities will lift people out of poverty and government reliance. Liberals regard the health-care program as a right for anyone who is eligible and maintain that access to care is an underpinning for poor people to improve their lives.
During the Obama administration, the CMS rebuffed several state efforts to incorporate work requirements into Medicaid. But on her first day in office in March, Administrator Seema Verma, who had as a consultant designed Medicaid plans with such requirements, sent governors a letter signaling her receptivity.
Less than two weeks ago, the CMS issued a policy that laid out a justification for states to require "community-engagement" activities for able-bodied adults as a condition of getting or staying on Medicaid. The following day, the agency approved Kentucky's plan as the first to put the idea into practice. Gov. Matt Bevin (R) and other Kentucky officials say their requirements and other changes, including monthly premiums for many in the program, will begin in July.
Ten other states also have applied for federal permission to add work requirements to Medicaid, and additional states are considering doing so.
If it were to succeed, the lawsuit would directly affect only Kentucky's plan. The complaint alleges that allowing Kentucky to move forward violates the Administrative Procedure Act and a section of the Constitution that requires presidents to "take care that the laws be faithfully executed."
The complaint asks the court to certify the case as a class action, saying that the 15 named plaintiffs' circumstances mirror those of many Kentuckians on Medicaid who could be harmed under the changes. It also says the opponents will ask for a preliminary injunction to block the state from moving forward as a judge weighs the plan's legality.
Specifically, the lawsuit says that federal Medicaid law requires states, which share responsibility for the program, to cover all members of any group of residents they choose to cover — and thus cannot impose extra eligibility requirements.
In adding a requirement for many able-bodied people on Medicaid to work for 80 hours per month or log the same hours of schooling, job-training, volunteering or care-taking, Kentucky "adds a new unprecedented condition of eligibility that is not permitted" under the federal law, the suit alleges.
According to the complaint, parts of Kentucky's plan run afoul of aspects of Medicaid law. For instance, the suit says, the plan will undermine federal requirements that states provide retroactive coverage to people who join the program and have access to transportation to medical appointments, even when those are not emergencies.
It also says that the insurance premiums Kentucky will charge violate federal law limiting such premiums only to beneficiaries with incomes of at least 150 percent of the poverty level.
In arguing that the case should be treated as a class action, the complaint sketches out the lives and needs for medical care of each of the 15 named plaintiffs. Many of them joined the program in 2014, when Kentucky expanded the program under the Affordable Care Act and then-Gov. Steve Beshear (D).
One of them, Ronnie Stewart, is 62, lives by himself in Lexington and held jobs in mental health clinics until he was laid off several years ago. After a homeless stint, he began working as a hospital medical assistant. He retired recently "because he could not be on his feet all day anymore."
He enrolled in Medicaid in 2014, and it has covered treatment for his diabetes, arthritis and high blood pressure, as well as cataract surgery, the suit says. "He is concerned that he will lose his health coverage if he is unable to work because of his health or if he takes a job with varying work hours."