Federal judge blocks Medicaid work rules in setback for Trump

A federal judge in Washington blocked specific Medicaid work requirements in Arkansas and Kentucky on Wednesday, though he stopped short of deciding whether any work requirements are incompatible with the program's mission to provide health care to underprivileged people.

U.S. District Judge James E. Boasberg ruled that the Department of Health and Human Services' approval of the Arkansas work requirement was "arbitrary and capricious because it did not address ... whether and how the project would implicate the 'core' objective of Medicaid: the provision of medical coverage to the needy." The Obama-appointed judge invoked similar language in his ruling on the Kentucky requirement.

Work requirements are already in effect in Arkansas, but Kentucky's program has been on hold because of lawsuits. Both states want "able-bodied" adults who get health insurance through ObamaCare's Medicaid expansion to work, study, volunteer or participate in "community engagement" activities.

Kentucky Republican Gov. Matt Bevin said his state would appeal. Bevin has threatened to end Kentucky's Medicaid expansion covering more than 400,000 people if work requirements are ultimately struck down.

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"We have one guy in Washington who thinks he owns Kentucky," said Bevin, apparently referring to the judge. "We're right, and we'll be right in the end. And one guy can gum up the works if he wants, for a while, but this, too, shall pass."

Arkansas Gov. Asa Hutchinson, also a Republican, said he was disappointed by the decision and would publicly address it on Thursday.

The GOP leader of the Arkansas Senate said he doesn't believe the ruling jeopardizes the future of Medicaid expansion, which covers more than 200,000 residents. About 18,000 have lost coverage as a result of the work requirements.

"I don't think there's any reason for the state to panic," said Senate President Jim Hendren, who's also the governor's nephew. "This is another obstacle in our path to try to do the best we can in Arkansas with the chips the federal government and the judiciary gives us."

States are traditionally allowed broad leeway to set Medicaid benefits and eligibility. Overall, Medicaid is the government's largest health insurance program, covering about one in five Americans, ranging from many pregnant women and infants to severely disabled people and elderly nursing home residents.

Advocates for the poor say that Medicaid is a health care program and that work requirements have no place in it.

"It is nonsensical and illegal to add obstacles to Medicaid for large groups of individuals who are already working, or full-time health care providers for family members, or suffering chronic health matters," said Jane Perkins, legal director of the National Health Law Program, a nonprofit that sued the government.

"Work should not be a key to health care access."

The Trump administration isn't giving up, said the head of the Centers for Medicare and Medicaid Services.

"We will continue to defend our efforts to give states greater flexibility to help low-income Americans rise out of poverty," Seema Verma said in a statement. "We believe, as have numerous past administrations, that states are the laboratories of democracy and we will vigorously support their innovative, state-driven efforts to develop and test reforms that will advance the objectives of the Medicaid program."

President Trump supports work requirements for public programs across the government. Last year, he signed an executive order directing Cabinet agencies to add or strengthen work requirements for programs including subsidized housing, food stamps and cash welfare.

HHS had already acted. Early in the administration, top officials invited states to apply for waivers that would allow Medicaid work requirements. Verma says she believes work is important to improving the health and well-being of Medicaid recipients.

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Eight states have had their requests approved, though not all have put their programs in place, according to the Kaiser Family Foundation. Requests from seven others are pending. In one of those states, Virginia, a work requirement was key to getting the legislature to approve Medicaid expansion.

Nationally, some 12 million people are covered by the Medicaid expansion, a key component of former President Barack Obama's health care law, adopted by 37 states. Officials in GOP-led states have argued that work requirements and other measures such as modest premiums are needed to ensure political acceptance for the expansion.

The Associated Press contributed to this report.