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The Bevin and Trump administrations are pointing to work requirements already in use by food-aid programs like SNAP as a reason the U.S. Court of Appeals should reverse a decision to strike down Kentucky’s Medicaid overhaul.

In briefs filed last week, the state and federal government maintain that Health and Human Services Secretary Alex Azar used proper judgment to approve the state’s Section 1115 waiver, which calls for certain able-bodied, non-elderly Medicaid recipients to work or engage in their communities 20 hours a week.

The administrations also liken Kentucky work requirements to those already in use by food-aid programs, such as the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF).

“There is no reason why a Section 1115 waiver cannot test a community-engagement program in Medicaid, given that SNAP and TANF already have work-oriented programs,” the state argued in a brief filed in the District of Columbia Circuit.

“Surely Section 1115 allows the Secretary to test whether longstanding work-oriented programs from other public-assistance programs will work in Medicaid,” the state added.

Both the state and the Trump administration are appealing a March decision by U.S. District Judge James Boasberg that sidelined the state’s Section 1115 waiver, also known as Kentucky HEALTH.

Boasberg vacated the Trump administration’s November 2018 re-approval of the waiver, sending it back to the U.S. Department of Health and Human Services, just as he had done last year in a similar legal challenge.

Siding with a group of Medicaid beneficiaries who’d filed suit, the judge said the Trump administration’s approval of the work requirements in Kentucky HEALTH was “arbitrary and capricious” and conflicted with federal law.

In its new filing, the federal government argues that Boasberg was influenced by portrayals of the food-aid work requirements being counterproductive to low-income people, making him skeptical that a demonstration project like Kentucky HEALTH could lead to employment.

But Congress does not view such requirements as counterproductive and, in some cases, has taken steps to strengthen them, the Trump administration said.

“The central objective of the 1996 welfare reform legislation was to break the ‘cycle of welfare’ through ‘the dignity, the power, and the ethic of work,’ ” noted the federal government’s brief, which quoted former President Bill Clinton.

Kentucky’s program and a similar one in Arkansas that Boasberg rejected “build on existing law” by testing similar work requirements, the brief added.

“The adults who are subject to the requirements of the demonstrations are overwhelmingly members of the ACA’s adult expansion population, which means they are not receiving Medicaid coverage on the basis of disability, advanced age, or pregnancy.”

The Kentucky Center for Economic Policy and Kentucky Voices for Health recently lamented that since last year about 21,400 people have lost their SNAP benefits because of a work requirement in Kentucky.

In the past, the state has estimated that 95,000 people would lose Medicaid coverage under Kentucky HEALTH within five years.

But in the Court of Appeals brief, the state takes issue with that figure and Boasberg’s criticism that Azar failed to estimate the number of Medicaid recipients who’d transition to other coverage because of Kentucky HEALTH.

Alex Azar, secretary of the U.S. Department of Health and Human Services | Photo courtesy of HHS

The Secretary is not required to know the results of Kentucky HEALTH in advance, the state said. “If the district court’s conclusion about the lack of predictive data concerning enrollees transitioning to other coverage is upheld, the Secretary’s Section 1115 authority will be reduced to testing ideas that have already been tested.”

The arguments are a further attempt to defeat a lawsuit brought by more than a dozen Medicaid beneficiaries, who argued to Boasberg that Kentucky HEALTH would harm Kentuckians and that Azar failed to adequately address concerns about potential coverage losses.

Boasberg struck down Kentucky HEALTH on the same day as he rejected a similar program in the state of Arkansas.

In a statement on Wednesday, Samuel Brooke of the Southern Poverty Law Center, said, “The district court correctly concluded that the federal government acted arbitrarily and capriciously when it approved the Kentucky and Arkansas work requirement programs.”

Brooke, a deputy legal director at the center, added: “When the waiver briefly went into effect in Arkansas, everyone saw the devastating effect it could have – thousands lost coverage in a matter of months. We are confident the appeals courts will similarly agree with the district court that the Medicaid program is designed to provide access to health care, and efforts to undercut that are contrary to Congress’s intent.”

Kentucky argues that Azar’s approval of Kentucky HEALTH was within the scope of Section 1115 of the Social Security Act and that “courts must be careful not to intrude on the Secretary’s judgment.” It also disputes that Azar’s decision was unsound.

“The Secretary’s rationale for approving Kentucky HEALTH is careful and well-reasoned,” the state’s brief said.

Also, “the Secretary adopted not only a reasonable reading of the Medicaid statute, but also the correct one in concluding that promoting financial independence is an objective of Medicaid as applied to participants in Kentucky HEALTH,” the federal government’s brief said.

Kentucky says Azar was right in concluding that Kentucky HEALTH is likely to help sustain the state’s Medicaid program. For one thing, it could be the key to Medicaid expansion contining.

Gov. Matt Bevin threatened last year to end Medicaid expansion. | Photo by Joe Sonka

Citing affordability concerns, Gov. Matt Bevin signed an executive order last year for Medicaid expansion to be dismantled if a judge were to stop Kentucky HEALTH from going forward.

“Surely an executive order establishing the law of Kentucky, as well as Kentucky’s other ‘repeated’ statements about the ACA expansion, suffice for substantial evidence about the sustainability of Medicaid in Kentucky, to the extent such a showing is required,” the state’s brief said.

Furthermore, “if more proof is needed, Kentucky at one time estimated that it will save more than $331 million — a substantial sum — because of Kentucky HEALTH,” a number that now understates the state’s savings, the brief said.

The state denied that it’s simply trying to kick people off Medicaid and to pick and choose which parts of the Affordable Care Act to implement.

Kentucky HEALTH “is not an effort to whittle down expanded Medicaid as much as the Secretary (Azar) will allow, but instead is, in the Secretary’s judgment, a holistic, research-based program that likely will assist in promoting Medicaid’s objectives,” the state said. “To conclude otherwise is to intrude on the Secretary’s judgment.”

The state also argued, “If Kentucky HEALTH solely concerns cutting benefits, why does it provide access to optional benefits, like dental and vision care, over-the-counter drugs, and gym memberships?”

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Darla Carter
Darla Carter is a hometown girl who recently joined the staff of Insider Louisville to mostly cover health. She previously served as a longtime health and fitness writer for The Courier-Journal, where she also worked for the Metro, Neighborhoods and Features departments. Prior to that, the award-winning journalist wrote for newspapers elsewhere in Kentucky and Tennessee, covering a range of topics, from education to courts. She's a graduate of Western Kentucky University, where she studied journalism and philosophy, and is the proud mom of two young children.