A second legal challenge to the state’s planned overhaul of Medicaid will be heard Thursday in Washington, D.C.
The lawsuit pits more than a dozen Kentucky Medicaid beneficiaries against the Trump administration and the state of Kentucky over the re-approval of the Kentucky HEALTH program last November.
U.S. District Judge James Boasberg will hear oral arguments in the case, which is taking place mere weeks before the program is scheduled to go live April 1. Earlier that day, he’s set to hear arguments in a lawsuit over a similar program in Arkansas.
Regarding the Kentucky HEALTH case, “only the court will know for sure if it’s going to issue a ruling by April 1, but we have made clear to the court that that is when plaintiffs believe a ruling should be entered by,” said Sam Brooke, deputy legal director at the Southern Poverty Law Center.
The timing is similar to a hearing that was held before Kentucky HEALTH’s previously planned launch date of July 1, 2018, and the judge was able to issue a decision before then, Brooke noted.
“We are hopeful the court will do the same thing here,” he said.
The case centers on Kentucky’s Section 1115 waiver, a test project that would require some Medicaid recipients to complete — and report — 80 hours a month of work or “community engagement,” such as volunteering or job training. Other features of the Kentucky HEALTH program include monthly premium payments for some, and a My Rewards account to earn virtual dollars to pay for certain benefits, such as coverage of routine vision and dental services.
Critics have argued that the complexity of the waiver and stumbling blocks, such as lack of internet access, will result in many people losing much-needed insurance medical benefits. More than 18,000 people have reportedly lost coverage in Arkansas, which last June became the first state to implement this kind of work requirement.
In court documents, the Kentucky HEALTH plaintiffs contend that the Trump administration, through U.S. Health and Human Services Sec. Alex Azar, is attempting to transform the Medicaid program without Congressional authorization and to “explode” Medicaid expansion, a provision of the Affordable Care Act that is credited with providing coverage to nearly a half-a-million low-income Kentuckians.
The administration is “transforming Medicaid from a program designed to ensure health care coverage for needy individuals to a work program that strips their coverage in a manner inconsistent with Medicaid’s fundamental purpose,” the plaintiffs argue in the court record. “The Secretary’s re-approval of Kentucky HEALTH ‘carries national consequences … that will likely be felt … broadly across the nation.'”
In January 2018, Kentucky became the first state in the nation to get its Section 1115 with a Medicaid work requirement approved. But the program got sidetracked when a group of Medicaid beneficiaries filed a lawsuit challenging the initial approval of Kentucky HEALTH.
The plaintiffs argued that the program would jeopardize the health coverage of tens of thousands of Kentuckians and that its approval was illegal.
However, in court documents, the federal government argues that Azar made a rational decision, while acting within the authority given to him by Congress, with the idea that Kentucky HEALTH would help beneficiaries achieve financial assistance through community engagement, reduce dependency on public assistance, incentivize healthy behaviors and allow the state to stretch its finite resources.
In the first legal challenge, Boasberg sided with the beneficiaries last June, saying the federal approval of Kentucky HEALTH had been made in an “arbitrary and capricious” manner. He kicked the program back to the U.S. Department of Health and Human Services for further review, but the Trump administration ultimately gave the program the green light again late last year.
The lawsuit was refiled by a similar group of Medicaid beneficiaries earlier this year as part of the second legal challenge. They argue that Kentucky HEALTH will harm Kentuckians across the state, from custodians and cashiers to musicians and retired workers, in need of a range of health services and that Azar still hasn’t adequately addressed concerns about perhaps 95,000 people losing coverage if Kentucky HEALTH goes into effect.
“In short, the Secretary’s re-approval of Kentucky HEALTH suffers from the same errors that infected his initial approval,” they note in a court document. “He again failed to rationally consider how the project’s heightened barriers to coverage could possibly promote the Medicaid Act’s central purpose of furnishing medical assistance to people whose incomes are insufficient to meet the cost of necessary medical care.”
Gov. Matt Bevin filed an executive order last year saying the state would terminate Medicaid expansion if a court blocked one or more components of Kentucky HEALTH.
The state recently reiterated that in a court document: “Without Kentucky HEALTH, the governor’s executive order will take effect. Surely keeping expanded Medicaid in the form approved in Kentucky HEALTH is more likely to assist in advancing the objectives of Medicaid in Kentucky than not having any form of expanded Medicaid at all.”