A federal judge has blocked work requirements for Medicaid patients in Kentucky, just days before new rules mandated by Gov. Matt Bevin's administration were set to go into effect.
In Friday's ruling, U.S. District Judge James Boasberg called the Trump administration's approval of the program, Kentucky HEALTH, "arbitrary and capricious."
He writes that in approving Kentucky's work requirement proposal, Health and Human Services Secretary Alex Azar "never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid."
The judge pointed out that Azar did not mention that 95,000 people could lose coverage under the plan — an oversight that he called "glaring."
A number of health policy experts praised the ruling, which they've described as "scathing" and "savage."
"The court made the right decision," says Elizabeth Lower-Basch, director of income and work supports at the Center for Law and Social Policy. "It found that HHS did not even consider the basic question of whether the waiver would harm the core Medicaid goal of providing health coverage, and it prohibits Kentucky from implementing it until HHS makes such an assessment."
HHS approved Bevin's request to change Kentucky's Medicaid program in January. It requires "able bodied" Medicaid recipients to either find work, do job training or do volunteer work to be eligible for medical benefits. It was the first state to get such approval, after Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, said she would look favorably on such proposals.
Verma said in a statement that she is disappointed by the decision.
"States are the laboratories of democracy and numerous administrations have looked to them to develop and test reforms that have advanced the objectives of the Medicaid program. The Trump Administration is no different."
She said the agency is talking with the Justice Department to decide whether to appeal.
Under Bevin's predecessor, Gov. Steven Beshear, the state had expanded Medicaid eligibility to more than 500,000 low-income residents. The Affordable Care Act allowed states to extend Medicaid benefits — which had been reserved for the disabled and parents of small children — to low-income adults with no children.
Verma and Azar have argued that Medicaid beneficiaries will benefit from what's known as "community engagement" requirements because finding work will help lift them from poverty, and therefore improve their health.
But the judge didn't buy that argument.
Instead, he wrote, HHS failed to consider whether the work requirements would do anything to further the program's core mission, which is to provide medical care to the poor.
"While plaintiffs and their amici assert that these proclaimed health benefits are unsupported by substantial evidence, the Court need not enter that thicket. The Secretary's analysis, instead, fails for a more basic reason; it is little more than sleight of hand," the judge wrote.
"The message here? Anybody who wants to add work requirements, the bar is very high to now show that there is a connection to health," says Rodney Whitlock, a health policy analyst at Mintz Levin, a law firm with expertise in health care regulations.
HHS has approved work requirements for Medicaid in four states. An additional seven states have requests awaiting agency approval, according to the Kaiser Family Foundation