Federal judge blocks Kentucky’s Medicaid work requirements

Kentucky's Medicaid work requirement isn't going to roll out on Sunday afterall.

Kentucky Gov. Matt Bevin speaks as Donald Trump listens.  (Photo by Mark Wilson/Getty Images)
Kentucky Gov. Matt Bevin speaks as Donald Trump listens. (Photo by Mark Wilson/Getty Images)

A federal judge blocked Kentucky’s work requirement waiver Friday, meaning tens of thousands of low-income residents will not need to report working or volunteering at least 20 hours of work a week to keep their health care coverage.

U.S. District Judge James Boasberg, an Obama appointee, was to consider whether a slew of changes to Medicaid — work requirements, premiums, lockouts, a whole package of restrictions — should go into effect on Sunday, July 1. He decided Kentucky’s waiver was “arbitrary and capricious.”

“Although the Secretary is afforded significant deference in his approval of pilot projects like Kentucky’s, his discretion does not insulate him entirely from judicial review. Such review reveals that the Secretary never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid,” Boasberg wrote. “This signal omission renders his determination arbitrary and capricious. The Court, consequently, will vacate the approval of Kentucky’s project and remand the matter to HHS for further review.”

Both the Trump administration and administration of Gov. Matt Bevin (R) are likely to appeal to the U.S. Court of Appeals for the District of Columbia.


In January, Bevin signed an executive order saying he’d end Medicaid expansion entirely should the court hand consumer advocates a win. Though it will take some time for that to actually happen, roughly 400,000 residents could lose their insurance if Bevin follows through on his threat. The Trump administration would still need to approve this request.

“This is an executive order, it’s the law of Kentucky and it’s self-executing. There’s nothing left for the Governor to do on this,” Matthew Kuhn, Bevin’s Deputy General Counsel, said two weeks ago during oral arguments.

To this the federal judge said on Friday, “Even if Kentucky decides to discontinue benefits pursuant to the EO, the state will not do so until ‘all appeals of the judgment have been exhausted or waived.'”

The court ultimately found that the waiver doesn’t save as much money as the government claimed (and the government doesn’t explain why the budget savings have to come from cutting Medicaid); the secretary isn’t properly taking into account the effects on health care (as there are discrepancies as to how many will lose coverage); and the point is to promote health coverage in addition to health (as the Trump administration only focused on the latter).

Kentucky officials said 95,000 fewer people would have Medicaid coverage in five years due to the host of new requirements, but outside experts said anywhere between 175,000 to 300,000 would lose public insurance. In addition to work requirements, the new rules force high premiums on low-income people and lock out people who didn’t renew their eligibility in time.


Medicaid work requirements could make its way to the Supreme Court — a court that will be more conservative with Justice Anthony Kennedy on his way out. “Good luck getting a new court to strike down those waivers,” Nicholas Bagley, University of Michigan health law expert, told the Washington Post.

The national implications of the lawsuit are plentiful. The Trump administration approved work requirements in a number of other states, including Michigan, Arkansas, Indiana, and New Hampshire. Arkansas’ work rule went into effect in June, and the state could begin booting people off insurance for failing to meet it in September.

And seven other states are waiting for the Trump administration to approve their work requirements. Friday’s decision could slow down the approval process.

Officials with the Trump administration have argued time and time again that they approved several states’ request to impose work requirements because work improves health — despite the lack of evidence to support this claim. The fact is only 6 percent of non-elderly Medicaid enrollees who can work are not doing so already. Those that do work run the risk of losing coverage because of the onslaught of paperwork and the restriction mandates people work a set amount of hours, which doesn’t reflect the realities of people on Medicaid who often are in jobs with irregular hours.

The Trump administration first approved Kentucky’s Medicaid waiver in January, making it the first state to get the federal okay to impose work requirements. Less than a month later, the Southern Poverty Law Center, National Health Law Program, and Kentucky Equal Justice Center filed a lawsuit in the U.S. District Court for the District of Columbia on behalf of 16 Kentuckians with Medicaid insurance who could lose health benefits. Plaintiffs argued the Trump administration bypassed Congress to approve Kentucky’s changes, which, moreover, do not advance the goals of the Medicaid program but instead limit access to coverage and care for tens of thousands. 

“It is expressly an effort to transform Medicaid, not to improve it,” said the lead attorney representing the Kentucky Medicaid recipients, Ian Gershengorn, two weeks ago during oral arguments.

“It lacks any serious engagement with the lessons learned from prior failed or harmful waivers as one would expect in a true experiment,” Gershengorn told Judge Boasberg. “And perhaps most important, entirely absent from the analysis is any serious assessment of the impact on the tens or hundreds of thousands of people who will lose coverage or not receive care as a result of this project.” 

Representing the state of Kentucky and the Trump administration, Kuhn argued there would be more coverage loss given Bevin’s threat to end Medicaid expansion should they lose in court.

“The biggest point I have though on medical assistance is that the expanded population gets to keep coverage,” said Kuhn. “That is medical assistance. If this is struck down, they’re going to lose coverage. They’re going to keep their medical assistance if we have Kentucky HEALTH.”

Work requirements have made expansion possible in conservative states that historically rejected it, he noted, citing Virginia as a most recent example. Judge Boasberg was dubious of these arguments.

Some lawmakers in Congress are trying to impose national work requirements. The House Budget Resolution passed by committee is calling for a federal requirement that all states condition insurance on work. A recent Kaiser Family Foundation study found anywhere between 1.4 million to 4.0 million could lose coverage should that happen.

This is a breaking news story and will be updated.