D.C. Appeals court strikes down Medicaid work requirement

Last Friday, a three-judge panel for the D.C. Circuit struck down Arkansas’ Medicaid work requirement. Harris Meyer from Modern Healthcare reported: 

In a unanimous ruling, a three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit upheld a lower court decision that HHS’ approval of the Medicaid work requirement in Arkansas was arbitrary and capricious and not consistent with the primary objective of the Medicaid statute.

A similar waiver in Kentucky also was blocked by a lower court. But that state’s new Democratic governor recently terminated its Medicaid work requirement program and withdrew from the appeal.

This decision affirms a lower court decision to strike down the work requirements as inconsistent with the core objectives of Medicaid. According to the D.C. Circuit, the secretary of HHS acted in an “arbitrary and capricious manner” when he approved the waivers for work requirements: 

The D.C. Circuit opinion, written by Republican-appointed Judge David Sentelle, said the lower court “is indisputably correct that the principal objective of Medicaid is providing healthcare coverage.”

The Trump administration in its approvals of Section 1115 waiver requests from Arkansas and other states said requiring beneficiaries to report 80 hours a month of work or “community engagement” activities would lead to improved health outcomes and well-being for beneficiaries.

But the panel rejected that rationale.

“We agree with the district court that the alternative objectives of better health outcomes and beneficiary independence are not consistent with Medicaid,” Sentelle wrote.

This ruling comes as HHS has approved waivers for work requirements in ten other states. It remains to be seen if these states will move forward with their approved work requirement. It also remains to be seen if HHS will appeal the ruling to the Supreme Court. 

For the states who have expanded Medicaid and would like to implement a work requirement, this means that it is unlikely to survive a legal challenge. For those states that haven’t expanded Medicaid, it would seem to indicate that expanding Medicaid with some form of a work requirement would not stand up to a legal challenge. 

If there were to be another appellate court that deems the work requirements legal, then a Supreme Court case is likely. Until then, it seems that Medicaid work requirements for any population will not be moving forward.