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Federal Judge Blocks Work Requirements for Medicaid, Thwarting Trump

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Medicaid recipients can’t be forced to work to receive benefits, a federal court ruled today, in defiance of Trump administration plans to trim the rolls of the health-care program offered to the elderly, disabled, low-income families, and others.

The ruling continues benefits for as many as 175,000 Kentuckians who the state estimated didn’t meet the waiver’s rules. About 500,000 would have had to start paying premiums of up to $15 a month. If they had any changes in income or other circumstances and didn’t report within 10 days, they could have been locked out of coverage for up to six months.

The ruling could also have a broad impact on the government’s plans to restructure Medicaid. Kentucky is one of ten states that sought similar waivers after an open invitation from the Department of Health and Human Services (HHS) to impose restrictions on Medicaid. About 70 million people nationwide receive Medicaid coverage.

U.S. District Judge James E. Boasberg said that the secretary of HHS, currently Alex Azar, failed to review whether a waiver granted to Kentucky’s Medicaid program met the central tenet of helping to furnish medical assistance to its citizens. The judge called the decision to provide the waiver “arbitrary and capricious.” He denied the waiver’s implementation, and required HHS to provide an adequate review. The waiver was set to take effect on July 1.

Three non-profit groups brought suit against HHS, including the National Health Law Program, on behalf of 16 Kentuckians. The National Health Law Program’s senior attorney, Catherine McKee, said in a statement, “There is a reason why no previous administration has approved the severe provisions Kentucky is so bent on pressing – they do not furnish health care services. Instead they punish the very populations Medicaid is intended to protect.”

The Kentucky rules run along the same lines as Supplemental Nutrition Assistance Program (SNAP), the program that was formerly loosely called “food stamps.” For able-bodied adults aged 18 to 49 without dependents, that food-assistance program requires about 80 hours of work or the equivalent each month to receive benefits.

Kentucky’s Medicaid waiver offered broader categories, including community service, drug treatment, and attending school, and defined the working age as 19 to 64. But only a relatively small number of Medicaid recipients meet the requirements and aren’t also disabled, pregnant, defined as “medically frail,” or primary caregivers.

The work and equivalent requirements coupled with reporting are widely seen as ways to sweep people who are accidentally non-compliant from receiving care they are otherwise eligible to get.

Kentucky joined the Medicare expansion under a Democratic governor in 2014. The current Republican governor would like to limit or end the expansion, which covers about 460,000 Kentuckians outside of traditional Medicaid.

The judge swept all the other items in the waiver into his order for a new review, including variable premiums based on income and length of time enrolled, providing non-emergency transportation, and requiring individuals report changes in income or other eligibility within 10 days.