Trump’s Medicaid Work Requirements Face New Legal Challenge

(Bloomberg) -- Advocacy groups are mounting a new challenge to the Trump administration’s effort to limit health benefits for the poor by letting states impose work requirements.

The suit, filed in federal district court for the District of Columbia Tuesday, seeks to block the U.S. Health and Human Services Department from allowing Arkansas to kick people off Medicaid if they’re not employed or looking for work. It builds on an earlier effort by advocates for the poor to halt a similar requirement in Kentucky’s Medicaid program.

The suit was filed by Legal Aid of Arkansas, National Health Law Program and the Southern Poverty Law Center, on behalf of three Arkansas Medicaid beneficiaries. It accuses the federal officials who approved the state’s work requirement of unauthorized attempts to rewrite the U.S. Medicaid Act, saying the change “will harm Arkansans across the state who need a range of health services.”

Amy Webb, a spokeswoman for the Arkansas Department of Human Services, said the agency had not yet seen the lawsuit and had no immediate comment. A spokeswoman for HHS said the agency doesn’t comment on pending litigation.

The Trump administration cleared the way earlier this year for states to require some Medicaid recipients to prove they’re working, volunteering or training for a job in order to maintain coverage. The Obama administration had opposed such requirements as contrary to the purpose of the 53-year-old health program.

First State

In June, Arkansas became the first state where Medicaid work requirements took effect. People who don’t document the required 80 hours per month for three months can be terminated from the program. The requirement initially applies only to people age 30 to 49, with exemptions for various categories, including those who are pregnant, frail or in drug treatment. Starting in 2019, younger adults age 19 to 29 would be required to work as well.

About 280,000 people get health coverage through Arkansas Works, the state insurance program for adults at or near the poverty line, according to state data.

Only a small slice of that group -- about 27,000 people -- got notice in May that they’re subject to the work requirements. The majority were either already working or otherwise exempt from the mandate. About 7,000 people subject to the work requirement didn’t report sufficient hours to fulfill it, according to state data. Those who don’t meet the requirement after three months can be terminated from coverage.

So far, the Trump administration has signed off on efforts by Arkansas, Indiana, Kentucky and New Hampshire to impose work requirements. Seven other states have requested permission to take similar actions.

Until the Trump administration, Medicaid benefits had never been subject to work requirements. The Trump administration has said that requiring Medicaid beneficiaries to work or get training will push them to find employment and improve their health.

In the Kentucky suit, a judge ruled against the efforts to impose work requirements, saying the state didn’t adequately consider how the requirement would affect the health coverage of Medicaid beneficiaries.

The Medicaid changes in Kentucky would have required many recipients to pay monthly premiums and document at least 80 hours of work or other community activity each month to remain eligible for coverage. The requirements would have affected about 350,000 Kentuckians, according to an estimate by the state, and about 95,000 people would have lost Medicaid coverage over five years.

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