Federal judge blocks Kentucky's Medicaid work requirements

By ADAM BEAM and RICARDO ALONSO-ZALDIVAR, Associated Press

FRANKFORT, Ky. (AP) — A federal judge has blocked Kentucky's work requirements for Medicaid, dealing a blow to the Trump administration, which has been encouraging states to seek the requirements for able-bodied adults on the program.

Medicaid is a joint state and federal health insurance program for the poor and disabled. Kentucky was the first state in the country to get permission to require some of its Medicaid recipients to get a job or do some other type of work to keep their health coverage. The new rules were scheduled to take effect Sunday in a northern Kentucky suburb of Cincinnati.

But Friday, U.S. District Judge James E. Boasberg ordered the Trump administration to reconsider the program, ruling it had never adequately considered whether the changes would comply with the central tenet of Medicaid: Providing health care for its citizens.

"The Secretary never provided a bottom-line estimate of how many people would lose Medicaid with (the new rules) in place. This oversight is glaring," Boasberg wrote . "For starters, the Secretary never once mentions the estimated 95,000 people who would lose coverage, which gives the Court little reason to think that he seriously grappled with the bottom-line impact on healthcare."

U.S. Sen. Ron Wyden, the top Democrat on the committee that oversees Medicaid, said the decision is "good news for Americans who think health care is a right, not a prize to be won after enduring piles of bureaucratic busy work."

"This ruling is an important moment that shows the Trump administration does not have the authority to arbitrarily decide which Americans deserve health care," he said.

While Republican Gov. Matt Bevin's administration will almost certainly appeal the ruling, the decision is likely to cost Medicaid beneficiaries in the short term. Adam Meier, secretary of Kentucky's Cabinet for Health and Family Services, said earlier this week the state would likely eliminate dental, vision and pharmacy benefits for low-income adults if the court blocked the new rules. That's because he said the state's Medicaid program is facing a $300 million shortfall over the next two years and the new rules were "tools we had to mitigate that."

The ruling is a setback also for the Trump administration, which argued in court that former President Barack Obama's Medicaid expansion essentially created a new program under Medicaid. Along with disabled people and low-income parents and children, the Medicaid expansion allowed states to cover low-income adults with no children living at home. That changed the nature of the program, the administration asserted, and opened the way for provisions such as work requirements.

The national implications of Friday's ruling could take a while to sort out. Officials in Arkansas have already implemented similar work requirement rules there.

The drive to expand Medicaid in GOP-led states had gotten a boost from the prospect of work requirements, which appeal to conservatives. In Virginia, work requirements are part of a compromise between Democratic Gov. Ralph Northam and Republican legislators to expand Medicaid.

Nationally, about 12 million people have been covered through expanded Medicaid, which offers health insurance to people making up to 138 percent of the federal poverty line or about $16,750 for a single person.

State officials had spent months preparing to roll out the new rules, including printing and mailing eligibility notices to people impacted by the rule changes and identifying the 4,200 people in Campbell County who would be subject to the new requirements. Meier said it would cost about $600,000 to do all of that again.

The new rules would have required Medicaid recipients to have at least 80 hours per month of "community engagement" by either getting a job, volunteering for community service or going to school or workforce training classes. Lots of people were exempt, including pregnant women, full-time students, primary caregivers of children and the elderly and anyone designated "medically frail" — a broad term that includes people suffering from alcohol or drug addiction in a state that has been among the hardest hit by the opioid crisis.

Alonso-Zaldivar reported from Washington.