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Appeals Court Takes Up the Legality of Medicaid Work Requirements, Other Waiver Projects

Washington, D.C. - Today a three-judge panel of the U.S. Court of Appeals for the District of Columbia heard oral arguments in two cases concerning the Trump administration’s approval of Medicaid waiver projects, which among other things, condition Medicaid coverage on compliance with work requirements.

The cases, Stewart v. Azar and Gresham v. Azar, were brought by a group of low-income individuals in Kentucky and Arkansas, respectively, and challenge the administration’s approval of Section 1115 Medicaid waivers that would cause thousands of Medicaid enrollees to lose coverage. In addition to work requirements, the projects contain a number of other changes to the Medicaid program that restrict access to coverage and services.

Plaintiffs in both states are represented by the National Health Law Program, Southern Poverty Law Center, and Jenner & Block, Kentucky Equal Justice Center and Legal Aid of Arkansas are co-counsel in their respective cases. The three judge panel, comprising Judges Cornelia Pillard, Harry Edwards, and David Sentelle, is expected to rule in the coming weeks.

In oral arguments, Ian Heath Gershengorn, partner with Jenner & Block and NHeLP board member, argued that the U.S. Department of Health & Human Services violated federal law when it approved the waiver requests from health officials in Kentucky and Arkansas.

“These waivers are part of an avowed effort by the Secretary to transform Medicaid,” said Mr. Gershengorn who is chair of Jenner & Block’s Appellate and Supreme Court Practice. “But efforts to transform Medicaid are for Congress to enact through legislation, not for the Secretary to enact through administrative action.”

At the center of the cases is the ability of the Secretary of Health and Human Services to approve experimental Medicaid waiver projects.

National Health Law Program Legal Director Jane Perkins noted, “Section 1115 of the Social Security Act only allows the Secretary to approve experimental projects that further Medicaid’s purpose of furnishing medical assistance to low-income people. These waiver projects do not further this objective. By the government’s own framing, they are intended to transform Medicaid and explode Medicaid expansion. As such, they jettison thousands of people from Medicaid coverage. Only Congress can rewrite a statute—not this administration. We hope the appellate court will uphold the well-reasoned opinions of the district court.”

The government’s argument that implementing work requirements helps people live healthy lives also falls flat.

“The majority of people on Medicaid already work, and they rely on insurance to get the medicines and treatments needed to stay healthy enough to keep doing so. As we saw in Arkansas, working people lost jobs after the state took their Medicaid away,” said Kevin De Liban, staff attorney at Legal Aid of Arkansas.

While arguments over administrative action can feel hypothetical, the real world impact of these waiver projects is real and traumatic for low-income communities. Before Judge James E. Boasberg of the U.S. District Court for the District of Columbia vacated the Arkansas approval earlier this year, 18,000 Arkansans lost coverage for failure to comply with the work requirements.

In Kentucky, by the State’s own estimate, 95,000 Kentuckians would lose coverage if the project goes into effect. Moreover, the confusion and uncertainty adds to the burdens of individuals and families who are already struggling to make ends meet and adds additional pressure to those already living with complex medical needs.

“Kentucky’s proposed waiver project would be a huge step backward for the state,” said Betsy Davis Stone, Health Law Fellow at Kentucky Equal Justice Center. “Because of Medicaid expansion, Kentucky led the nation in reducing its uninsured rate. Unnecessary emergency room visits dropped; preventive care visits soared. This project would reverse those trends, blocking people who need health care the most from getting it.”

“The lower court correctly ruled – twice -- that imposing work requirements is arbitrary and capricious,” said Sam Brooke, deputy legal director for the SPLC.  “We are hopeful today’s appeals court will affirm the same, and will prevent these punitive measures against the working class from taking root in Kentucky and Arkansas.”

A copy of the latest brief filed can be seen here: GRESHAM v. AZAR


The oral argument can be listened to here.