The fate of Medicaid work requirements rests— for now— with U.S. District Court Judge James E. Boasberg. The judge heard arguments on June 15 in a Washington, D.C. courtroom packed to capacity with health care advocates, lawyers, scholars and reporters. The case at hand, Stewart v. Azar, was the legal challenge to the Trump administration’s effort to re-write Medicaid law and impose onerous new obstacles, such as work requirements and premiums, on very low income people. The requirements are part of Kentucky’s Section 1115 waiver plan, approved by Trump’s Health and Human Services department earlier in 2017. It was HHS’s first approval of a work requirement and other draconian changes to Medicaid, which was enacted by Congress to serve as health care program for the country’s low income individuals.
Kentucky’s waiver plan is at the heart of the Stewart, where the National Health Law Program, Kentucky Equal Justice Center, Southern Poverty Law Center, and Jenner & Block are representing Kentuckians who will be harmed if the state’s waiver plan takes effect on July 1.
After joking that the full courtroom must be overflow for the pre-trial hearing of Trump’s former campaign chief Paul Manafort — conducted earlier that day in the same courthouse — Judge Boasberg got down to business. During the hour-and-fifteen-minute hearing, Boasberg asked frequent clarifying questions of plaintiffs’ counsel, Jenner & Block attorney Ian Gershengorn, and counsel defending the lawsuit, who were from the U.S. Department of Justice and from Kentucky Governor Matt Bevin’s deputy general counsel.
Gershengorn began by explaining that the Kentucky waiver plan “will substantially limit access to care and coverage for tens of thousands of Medicaid recipients” and was “laying the groundwork for [similar] cookie-cutter waivers across the country.”
During each parties’ argument, Judge Boasberg asked about issues of standing raised by defending HHS’s actions. He then moved to substantive questions on the standard of review and the issue of whether the HHS secretary has statutory authority to introduce work requirements in Medicaid.
Gershengorn focused on the effects of the Kentucky waiver plan’s work requirements.
“Work requirements result principally in a reduction in benefits without getting people” stable jobs, he said. “Those are not the purposes of the [Medicaid] Act. … The purpose of the [Medicaid] Act is to provide coverage and care to the most vulnerable … and to provide that care generally free of charge,” he said. Gershengorn noted, however, that the Kentucky waiver plan would, by the Kentucky government’s own estimate, remove nearly 100,000 people from Medicaid coverage.
At one point, Boasberg asked whether plaintiffs contended that any waiver that reduced coverage could be approved. Gershengorn said such a waiver might be approved, but HHS would need to grapple with the lost coverage in explaining its decision. Gershengorn closed the plaintiffs’ argument by asking the judge to vacate the approval of the waiver and remand it the agency.
DOJ attorney Ethan Davis began the defense of the Kentucky Medicaid waiver program by arguing that previous administrations had also approved Section 1115 waivers concerning expansion populations. Davis warned that a ruling for the plaintiffs would place other states’ decisions whether to expand Medicaid in jeopardy.
Davis also contended that HHS’s waiver approval decisions were not judicially reviewable. Judge Boasberg then asked Davis whether HHS secretary could, hypothetically approve a waiver stating that Medicaid would no longer cover blind persons.
“If the Secretary did something like that … are you saying that could not be challenged in court?” Boasberg asked. Davis responded that the HHS secretary needed to do his job, saying, “You can always think of really extreme hypotheticals.”
Davis also frequently drew distinctions between the traditional Medicaid population and expansion population, stating the “primary purpose of Medicaid” was to assist the traditional population. Boasberg noted, of the Kentucky waiver plan, “I think the plaintiffs’ central argument is that it doesn’t. It doesn’t provide medical assistance.”
Regarding the nearly 100,000 people who would be yanked from Medicaid coverage under Kentucky’s waiver scheme, Davis said those unfortunate Kentuckians would “graduate” to commercial and marketplace coverage.
While referring to the purposes of the statute, Davis acknowledged the cost savings of the waiver program, claiming, “There is nothing wrong with that being a happy side effect.” Davis concluded by asking the judge that if he granted any remedy, to remand without vacating.
Gov. Matt Bevin’s Deputy General Counsel Matthew Kuhn followed Davis as an intervenor in the case to defend the waiver program. Kuhn noted that Kentucky ranked poorly on many health measures and said the Medicaid expansion was not doing enough to help the state’s predicament. He then said if the court blocked the Kentucky’s waiver scheme, Bevin would try to rollback Medicaid expansion. He cited the costs of Medicaid expansion, claiming, “That’s money the Commonwealth does not have.”
During a brief rebuttal to the arguments of DOJ and Bevin’s counsel, Gershengorn clarified that the plaintiffs were not challenging the portion of Kentucky’s waiver plan that provides additional treatment for substance-use disorders.
Noting that the Kentucky waiver plan is set to take effect on July 1, Boasberg said he planned to issue a decision in Stewart within two weeks. See here for more information about National Health Law Program’s work to ensure that the waiver process is only used to make Medicaid better for beneficiaries.