Brief Summary: Individuals are challenging the implementation of state policies that condition Medicaid coverage on the ability of enrollees to satisfy work requirements. The policies typically require enrollees to attest to a certain number of hours spent on activities like working or job training each month.
Georgia v. Brooks-LaSure (Georgia)
Overview: On December 23, 2019, the Governor of Georgia submitted a 1115 Demonstration Waiver to the Centers for Medicare and Medicaid Services (CMS) requesting that the agency amend Arkansas’s existing Medicaid program. On October15, 2020, CMS announced its approval of Georgia’s waiver. The amendment would allow Georgia to condition Medicaid eligibility on a minimum, monthly completion of 80 hours of work or activities that could lead to employment.
In February 2021, President Biden’s CMS notified states that it planned to rescind the waivers. that were set to go into effect in July 2021. However, Georgia delayed its’ start date in effort to negotiate a plan with CMS. On December 23, 2021, however, CMS revoked Georgia’s waiver, which would have subject beneficiaries to the work requirements as soon as January 1, 2022, because Georgia had not submitted an amended waiver. On January 1, 2022, the state of Georgia filed a lawsuit against CMS, alleging that the agency attempted an “egregious regulatory bait and switch on the core terms of a massive federal state program” that terminated a “carefully negotiated federal-state program” after “arbitrary and capricious decision making.”
Court Updates: On August 2022, the U.S. District Court for the Southern District of Georgia sided with the state, holding that the rescission of the 1115 waivers was arbitrary, and that CMS failed to consider that rescinding the program could mean less Medicaid coverage in Georgia. CMS has declined to appeal the decision.
Current Status: Georgia’s work-for-Medicaid program is set to take effect July 1, 2023.
Impact: As of July 1, 2023, individuals in Georgia will be required to complete 80 hours of work or activities that could lead to employment to maintain their Medicaid eligibility. This is a concerning requirement for individuals who are chronically-ill or auto-immune compromised as this requirement could increase their risk of contracting COVID-19. CMS has also expressed concern that Medicaid work requirements could prevent beneficiaries from receiving coverage and not improve employment or job training.
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Update: On April 18, 2022, the Supreme Court of the United States dismissed the below cases as moot .
Stewart v. Azar (Kentucky)
Overview: On August 24, 2016, the Governor of Kentucky submitted an application to the Centers for Medicare & Medicaid Services (CMS) to implement Kentucky HEALTH, a program that would condition Medicaid coverage on enrollees satisfying work requirements. In submitting its application, the state invoked a narrow statutory waiver authority that allows experimental projects “likely to assist in promoting the objectives” of Medicaid. On January 12, 2018, CMS approved Kentucky HEALTH. On January 24, 2018, enrollees of Kentucky’s Medicaid program filed a class action suit against CMS, asserting that the agency violated the Administrative Procedure Act (APA) by approving Kentucky HEALTH. The plaintiffs argued that CMS’s approval of Kentucky’s application is “an authorized attempt to rewrite the Medicaid Act, and the use of the statute’s waiver authority to ‘transform’ Medicaid is an abuse of that authority.”
Court Updates: United States District Court for the District of Columbia – Opinion, June 29, 2018
The court ruled in favor of the plaintiffs, finding that CMS’s approval of Kentucky’s application was arbitrary and capricious under the APA. The court stated the APA requires the agency to “examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” Here, CMS failed to consider adequately the impact of Kentucky HEALTH on Medicaid coverage, including failing to consider the estimated 95,000 individuals that would lose coverage because of this project.
United States District Court for the District of Columbia – Opinion, March 27, 2019
Following the ruling, CMS opened a new comment period on Kentucky’s application. Kentucky submitted the same, unaltered application to CMS despite the court’s ruling, and CMS reapproved the unaltered application on Nov. 20, 2018. In its approval, CMS stated that it adequately considered the likelihood that Kentucky HEALTH would cause nearly 95,000 individuals to lose coverage, but that number is “dwarfed by the approximately 450,000 people who would suffer that fate if Kentucky ends its coverage entirely of those who have joined the Medicaid rolls via the Patient Protection and Affordable Care Act (ACA), as it has threatened to do if this project is not approved.” A second class action suit was initiated against CMS on January 14, 2019. On March 27, 2019, the United States District Court for the District of Columbia granted the plaintiffs’ motion for summary judgment, again holding that the approval of Kentucky’s application was arbitrary and capricious under the APA.
Current Status: On April 19, 2019, the United States Court of Appeals for the District of Columbia Circuit granted CMS’s request for an expedited appeal. In October 2019, the court heard oral arguments. In November 2019, Governor Andy Beshear replaced former Governor Matt Bevin. One of his first actions as governor was to rescind the Kentucky HEALTH plan and to remove Kentucky from the lawsuit. Following Gov. Beshear’s decision to remove Kentucky from the lawsuit, the U.S. Court of Appeals for the District of Columbia Circuit dismissed the case for being moot on Jan. 8, 2020.
Impact: Kentucky Medicaid recipients will not face work requirements as a condition of eligibility for Medicaid.
Gresham v. Azar (Arkansas)
Overview: On June 30, 2017, the Governor of Arkansas submitted an amendment to CMS requesting that the agency alter Arkansas’s existing Medicaid waiver. This amendment would allow Arkansas to condition most enrollees’ Medicaid eligibility upon satisfying work requirements. Non-disabled enrollees ages 19 to 49 would be required to engage in 80 hours of specified employment or community engagement activities every month or earn an income equivalent to 80 hours of work unless they can show that they qualify for an exemption. On March 5, 2018, CMS approved Arkansas’ amendment. On August 14, 2018, several Medicaid beneficiaries filed a class action suit against CMS, asserting that the agency violated the APA by approving Arkansas’s amendment.
Court Updates: United States District Court for the District of Columbia – Opinion, March 27, 2019
On March 27, 2019, the United States District Court for the District of Columbia granted the plaintiffs’ motion for summary judgment, holding that the Agency did not undertake the analysis required to approve of Arkansas’s waiver amendment, and therefore, the decision was arbitrary and capricious under the APA. Under the APA, an agency is required to “examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made.” The court found that CMS failed to sufficiently consider whether the program would promote the objectives of Medicaid, including how it would affect the provision of medical assistance to the needy.
United States Court of Appeals for the District of Columbia Circuit – Opinion, February 14, 2020
On February 14, 2020, the United States Court of Appeals for the District of Columbia Circuit upheld the decision of the District Court. The Court reasoned that the Agency failed to show that the demonstration project would advance the core objectives of the Medicaid program, and held that the decision to approve the demonstration project was arbitrary and capricious under the APA.
After the decision was issued by the U.S. Court of Appeals for the D.C. Circuit, the case has not yet been appealed.
Current Status: The United States Court of Appeals affirmed the District Court’s decision and held that Arkansas program was lawful because the HHS Secretary had acted in an arbitrary and capricious manner. Read the decision here.
Impact: Arkansas Medicaid beneficiaries will not face work requirements.
Philbrick v. Azar (New Hampshire)
Overview: On October 24, 2017, New Hampshire submitted a request to CMS to amend its existing Medicaid waiver. This amendment would require most non-disabled Medicaid enrollees ages 19 to 64 to complete 100 hours of qualifying employment or other community-engagement activities each month (or show that they satisfy an exemption) or risk losing their healthcare coverage. In November 2018, CMS approved New Hampshire’s amendment. On March 20, 2019, four New Hampshire Medicaid beneficiaries filed a class action suit against CMS, asserting that the agency violated the APA because it did not adequately consider the effects of the amendment on Medicaid coverage.
Court Updates: United States District Court for the District of Columbia – Opinion, July 29, 2019
The court agreed with the plaintiffs, holding that the approval of New Hampshire’s waiver amendment was arbitrary and capricious under the APA. The court noted that New Hampshire’s work requirements, on their face, are more exacting than Kentucky’s and Arkansas’s, mandating 100 monthly hours, as opposed to 80, of employment or other qualifying activities. They also encompass a larger age range than Arkansas, which applied the requirements only to persons 19 to 49. The court found that, for the fourth time, HHS had “fallen short” of the fundamental administrative law requirement of adequately considering the effects of the demonstration project on Medicaid coverage.
On October 31, 2019, the defendants appealed the decision in the United States Court of Appeals for the District of Columbia Circuit.
Current Status: On March 27, 2021, HHS notified New Hampshire officials that is was withdrawing approval for the demonstration project that imposed work requirements for Medicaid eligibility. Read more here.
Impact: New Hampshire Medicaid beneficiaries will not face work requirements.
Rose v. Azar (Indiana)
Overview: In 2007, Indiana applied to CMS for a waiver to expand Medicaid coverage to adults who were otherwise ineligible for coverage, known as the Healthy Indiana Plan (HIP). In 2017, Indiana applied to CMS to extend HIP for three additional years and to condition Medicaid coverage on enrollees satisfying work requirements. The state estimated that, once fully implemented, the work requirements would result in roughly 24,000 individuals losing Medicaid coverage each year for failing to comply. On February 1, 2018, CMS approved the HIP extension, which gave Indiana permission to implement the work requirements policy. On September 23, 2019, Medicaid beneficiaries filed a class action lawsuit against CMS in the United States District Court for the District of Columbia, asserting that the agency exceeded its authority under the APA by approving Indiana’s HIP extension.
Court Updates: The district court has not yet issued its opinion.
Current Status: On June 25, 2021, HHS revoked Indiana’s work requirement for Medicaid beneficiaries. Read more here.
Impact: In October 2019, Indiana’s Medicaid agency announced it would voluntarily postpone plans to implement Medicaid work requirements in light of federal lawsuits challenging such requirements.
Young v. Azar (Michigan)
Overview: In June 2018, the Michigan legislature passed a law directing the state to request permission from CMS to condition Medicaid eligibility on work requirements. Michigan submitted the application to CMS, which would require non-disabled enrollees aged 19 to 62 to engage in specified work or work-related activities for 80 hours per month or show that they qualify for an exemption. The agency approved the Section 1115 waiver on December 21, 2018. On February 8, 2019, as required by the state law, the Michigan governor accepted the terms of the waiver, noting that between 61,000 and 183,000 individuals would lose health coverage as a result of the work requirements, when it is implemented in January 2020. On November 22, 2019, a class action lawsuit was initiated against CMS on behalf of Medicaid beneficiaries who will be harmed by the work requirements policy. This suit asserts that CMS exceeded its authority under the APA by approving the demonstration project.
Court Updates: United States District Court for the District of Columbia – Opinion, March 4, 2020
The court issued a partial summary judgment vacating the work and community engagement requirements in the Healthy Michigan Plan Amended Demonstration Extension Application. Two other provisions of the 1115 waiver being challenged by the plaintiffs were not addressed by the ruling—a policy that would allow the state to charge individuals with incomes above 100 percent of the federal poverty level premiums of up to five percent of their income, as well as penalties for failing to pay the premiums; and a policy that would require individuals to complete certain “healthy behavior” activities, such as health risk assessments.
After the decision was issued by the U.S. District Court for the District of Columbia, the case has not yet been appealed. At the request of Medicaid officials, a federal judge has paused the case to allow state officials to focus on the COVID-19 public health emergency.
Current Status: On April 7, 2021, HHS revoked approval for Michigan’s Medicaid work requirements. Read more here.
Impact: Medicaid recipients will not be required to prove they are working, in school, amid job training, or engaging in other activities, such as looking for a job, at least 80 hours per month to receive Medicaid coverage.
Last Updated on July 21, 2023 by Aimed Alliance
