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Analysis

Appellate Judges Seem Skeptical of Medicaid Work Requirements

By Steven Porter  
   October 14, 2019

During oral arguments, multiple judges said repeatedly that the government's arguments appear to go beyond the law.

Three federal appellate judges who heard oral arguments Friday in a dispute over Medicaid work requirements sounded skeptical of the Trump administration's position, suggesting they may be inclined to agree with a lower court's decision to toss out the government's approvals of such requirements.

The case at hand deals with only two states, Kentucky and Arkansas. But there are similar legal challenges to Medicaid work requirements in two others, New Hampshire and Indiana, as well. And the administration has approved requirements in at least five more states, with nine additional applications pending, according to the Kaiser Family Foundation.

Proponents of the work rules argue they help beneficiaries climb out of poverty by giving them stronger incentives to find gainful employment and advance the government's interest in operating Medicaid in a cost-effective way. But detractors argue the policies push vulnerable people off of government-sponsored health plans and aren't rooted in the Medicaid program's purpose.

Friday's hearing took place before three judges: Cornelia T.L. Pillard, who was appointed in 2013; David B. Sentelle, who was appointed in 1987; and Harry T. Edwards, who was appointed in 1980.

Pushing back against an argument raised by an attorney for the government, Edwards suggested that the U.S. Department of Health and Human Services appears to be advancing its own priorities beyond those enacted by Congress, as Alexandra Marquez reported for McClatchy's D.C. Bureau.

"You're looking for objectives that are not in the statute," Edwards reportedly told the attorney, Alisa B. Klein.

Klein likened the work requirements in Medicaid to those in other programs, such as the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). Sentelle, however, said the comparison is weak because Congress approved work requirements for SNAP and TANF but didn't do so with the Affordable Care Act and its Medicaid expansion, as McClatchy reported.

Audio records of the hearing are available on the D.C. Circuit Court's website.

Friday's hearing came a day after the U.S. Government Accountability Office released a report finding that the Centers of for Medicare & Medicaid Services had failed to consider the administrative costs of implementing Medicaid work requirements.

Five states gave the GAO estimates of their administrative costs. Their estimates ranged from more than $6 million in New Hampshire to nearly $272 million in Kentucky, according to the report. Altogether, the five-state total estimate was more than $408 million.

The GAO recommended that CMS account for a state's projected administrative costs in assessing whether a state's Medicaid work requirements would be budget neutral. But the agency disputed the GAO's methodology and rejected its conclusion.

Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

The case pertains to two states, but there are two related legal challenges pending and potentially more to come.

The hearing came after a GAO report faulted the way CMS accounted for administrative costs in implementing the requirements.


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