Court Hears Oral Argument on New Hampshire’s Troublesome Section 1115 Medicaid Waiver

Court Hears Oral Argument on New Hampshire’s Troublesome Section 1115 Medicaid Waiver

Sitting at counsel’s table during the July 23rd oral argument in Philbrick v. Azar, some lyrics by The Clash came to mind: “Should I stay or should I go now? If I go, there will be trouble. And if I stay it will be double. So come on and let me know.” Philbrick concerns the Department of Health and Human Services’ approval of a restrictive Section 1115 Medicaid waiver project. That project allows New Hampshire to require adults who qualify for coverage under the Affordable Care Act’s Medicaid expansion to meet mandatory work requirements as a condition of coverage and also terminates the Medicaid Act’s guarantee of 3-months retroactive coverage.

During the argument, the Department of Justice attorney spent the vast majority of his time, not on the merits of the case, but asking the Court to postpone a ruling. The basis for the delay, he said, were actions taken by the State. First, the State plans to ask the Secretary of Health and Human Services to modify the retroactive coverage waiver to reduce the gap in coverage to 45 days rather than 3 months. Second, the State’s Medicaid Commissioner has also postponed the work requirement until October 1st with terminations to begin in December. Thus, the attorney for the Department of Justice argued, there is no need for an immediate decision. The Court should wait and see what the modified waiver says, and the work requirements delay could last long enough for everyone to know the results of the Departments’ appeals of Judge Boasberg’s opinions vacating similar cookie cutter waivers in Kentucky and Arkansas (more about that below).

The problem from our point of view is that the project can’t be fixed—overwhelming evidence shows that work requirements, whether they are implemented now or in 3 or 4 months, will jettison thousands of Medicaid enrollees from coverage; termination of retroactive coverage will saddle enrollees with medical debts and Medicaid-participating providers with uncompensated care burdens. So, regardless of the timing, there will be trouble.

Arguing for the Plaintiffs, National Health Law Program Attorney Catherine McKee asked the Court to rule immediately. She noted, first, that the case is fully briefed and ready to be decided, second, the retroactive coverage waiver is currently in effect and creating coverage losses now, third, even during the delay, New Hampshire is continuing to implement the approved project and this implementation creates confusion and negatively affects enrollees, and finally, the delay and any implementation changes the State makes around the edges will not change the legal problems with the waiver project the Secretary approved. She pointed out that the State has gathered data showing that nearly 17,000 Medicaid enrollees (roughly 68 percent of those subject to the work requirement) were standing at the edge of the coverage cliff, likely to be pushed off on August 1st because they had not met the work requirement. Judge Boasberg picked up on that drastic result, noting its similarity to the 16,000 people who actually did lose coverage in the first few months after Arkansas implemented its work requirements.

So, this waiver will be trouble, whether it goes into effect now or in a few months. Notably, the attorney representing New Hampshire also asked for a decision quickly.  At the conclusion of the argument, Judge Boasberg said he “will determine imminently whether I will rule imminently.”

As noted, Judge Boasberg spent little time on the actual merits of the case.  We were not surprised. The New Hampshire approval letter is a near carbon copy of approvals in Kentucky and Arkansas that Judge Boasberg struck down earlier this year.  Those opinions concluded that the Secretary could not justify restrictive Section 1115 waiver projects that will produce drastic coverage losses on the grounds that they may promote health, financial independence and generate savings. As Judge Boasberg pointed out in the cases (Stewart v. Azar (KY) and Gresham v. Azar (ARK), also co-counseled by NHeLP), these first two objectives are not independent Medicaid Act objectives and are so broad that they could justify the Secretary approving most anything – from requirements to eat certain foods to a requirement to exercise in a certain way. In other words, they have no limiting principles. And while the Court found that fiscal sustainability can be considered, it cannot eclipse Medicaid’s core objective, stated in the Medicaid Act itself, of furnishing medical assistance to low-income people. The government has appealed the cases to the DC Circuit Court of Appeals.

As for our position on the merits: We are arguing that the New Hampshire approval is déjà vu all over again because the Secretary followed the very same reasoning (sometimes verbatim) that he used in Kentucky and Arkansas. That isn’t surprising because, early on, the Trump administration announced its plan to “explode” the ACA Medicaid expansion and identified mandatory work requirements as a central element of that plan. Whether implemented now or in the future, these waiver would be trouble.

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