Appeals Court Invalidates Medicaid Work Requirements in Arkansas

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On February 14, 2020, the U.S. Court of Appeals for the D.C. Circuit issued its decision in Gresham v. Azar. This follows the decision issued by the U.S. District Court for the District of Columbia on March 27, 2019, which held that the Secretary of the U.S. Department of Health and Human Services acted arbitrarily and capriciously when he approved the “Arkansas Works” demonstration project. Included in Arkansas Works was a policy that would condition Medicaid coverage on enrollees’ satisfaction of work requirements. Because the Secretary’s approval was arbitrary and capricious, his approval of the demonstration project was invalidated. Following this decision, the government appealed the decision to the U.S. Court of Appeals for the D.C. Circuit.

The U.S. Court of Appeals for the D.C. Circuit analyzed whether the Secretary’s approval of Arkansas’ work requirements proposal was legal. The court ultimately affirmed the decision of the District Court because the Secretary failed to consider whether the demonstration project would advance the core objectives of the Medicaid program, which is to “furnish medical assistance . . . and rehabilitation and other services.” Instead, the Secretary asserted that Arkansas Works would improve health outcomes, “address behavioral and social factors that influence health outcomes,” and “incentivize enrollees to engage in their own health and achieve better health outcomes.” The Secretary’s decision to prioritize health outcomes over health care coverage proved to be inadequate to justify his decision to approve the demonstration project.

This decision will be influential as other cases involving Medicaid work requirements are heard on appeal. Additionally, it ensures that Arkansas Medicaid beneficiaries will not be subject to work requirements in the immediate future. However, this decision could be appealed to the U.S. Supreme Court.

Read the court’s decision to learn more about this issue.

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