Kentucky has been a lightning rod in the administration’s rewriting of the rules for the public health insurance system for poor Americans by inserting long-held conservative ideas — about individual responsibility and a limited government helping hand — for the first time in the history of a program run jointly by the federal government and states that began under the War on Poverty of the 1960s.
In January, Seema Verma, administrator of the Department of Health and Human Services’ Centers for Medicare and Medicaid Services, decided it would grant permission to states that wanted to created Medicaid work requirements. Kentucky quickly became the first to win approval. The move drew a swift lawsuit by opponents who contended the change undermined the program’s central purpose because even state figures predicted perhaps 95,000 people would lose coverage within five years.
Kentucky’s changes, a rallying cry by Gov. Matt Bevin (R), call for able-bodied adults on Medicaid to have a job for at least 80 hours per month or devote that amount of time to education, job training or volunteer work. People who fail to show they were meeting the rules would be frozen out for six months.
In late June, days before the requirements were to have begun, Judge James E. Boasberg, of the U.S. District Court for the District of Columbia, essentially agreed with the critics. He ruledKentucky could not move ahead with its plan because federal health officials had not adequately considered the requirement’s impact on the program’s central purpose: providing medical assistance to a state’s citizens.
The judge sent Kentucky’s plan back to HHS for further review.
The Trump administration did not appeal Boasberg’s ruling. Instead, CMS took the unusual step in July of reopening Kentucky’s proposal for another round of public comment.
In a statement Tuesday night, CMS spokesman Johnathan Monroe said the agency “worked diligently to analyze and consider the comments received,” concluding Kentucky’s plan “is likely to promote the objectives of Medicaid.”
A lengthy approval letter, dated Tuesday, to Kentucky officials makes clear that the version CMS just approved is substantially the same as the original with a few nuances, such as a more explicit monitoring requirement about its effects.
The approval letter argues Kentucky’s plan heeds Medicaid’s central purpose.
While the program is meant to promote access to insurance coverage, it says, “there is little intrinsic value in paying for services if those services are not advancing the health and wellness of the individual receiving them, or otherwise helping the individual attain independence.”
The letter also contends that, as some people leave the Medicaid rolls by gaining income and insurance through a job, “[s]uch measures may also preserve states’ ability to continue to provide the optional services and coverage” for those who still need the program.
Jane Perkins, legal director for the National Health Law Program, one of three organizations that lodged the lawsuit on behalf of 15 Kentuckians on Medicaid, said, “After the court decision, more than 11,000 additional comments were filed with HHS, the vast majority of them revealing why the waiver project would reduce Medicaid coverage, restrict access to health care services, and harm the health of Kentuckians. Nevertheless, HHS has once again given Kentucky permission to impose a burdensome work requirement, premiums, and lockout penalties on Medicaid enrollees.”
Cara Stewart, an attorney with the Kentucky Equal Justice Center, another plaintiff in the case, said she was not surprised the Trump administration had re-approved the state’s plan. But, she said, “I’m shocked they didn’t change much at all.”
Because the court case is still open, Stewart said, the plaintiffs will update their filing and ask again that Kentucky’s work requirements be found illegal. “We are going to be asking for the same thing — that harm be prevented,” she said. “We’ll be in the same court, same judge; everything will be on repeat.”
A similar lawsuit is pending in Arkansas, which in June became the first state to put its work requirements into effect. About 12,000 poor Arkansas residents so far have lost their Medicaid eligibility as a result.