Matt Bevin’s Kentucky Medicaid overhaul again rejected in court – Courier Journal

A federal judge in Washington has rejected for a second time Gov. Matt Bevin’s effort to overhaul Kentucky’s Medicaid program, dealing a resounding blow to his efforts to impose work requirements and other rules on “able-bodied” adults covered by the government health plan for the poor.

In a pair of closely watched cases that drew national attention, U.S. District Judge James E. Boasberg also rejected similar work requirements Arkansas imposed on its Medicaid program.

Kentucky had planned to launch its changes Monday, though it announced in February most of the changes wouldn’t begin until July 1. Arkansas’ plan is already underway.

Boasberg’s decision was hailed by the National Health Law Program, which led the legal challenge.

“Medicaid is federal and state program designed to provide health care; it is not and never has been a program intended to encourage work,” said Jane Perkins, legal director for the group. “The law is about providing health care services to low-income individuals and families and underserved populations.”

The National Health Law Program, the Kentucky Equal Justice Center and the Southern Poverty Law Center joined in filing the legal challenge, acting on behalf of 16 Kentuckians covered through Medicaid who they say would suffer direct harm and likely lose health coverage under Bevin’s changes

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Adam Meier, secretary of Kentucky’s Cabinet for Health and Family Services, which oversees Medicaid, called the ruling on the plan, which the state calls Kentucky HEALTH, illogical.

“In Kentucky, we want more than to simply give someone a Medicaid card they can put in their wallet — we want a program that focuses on actually improving health outcomes,” he said. “And that is what Kentucky HEALTH was designed to do.” 

He added, “Although a setback to our implementation schedule, we believe that we have an excellent record for appeal and are currently considering next steps.”

The rulings come as 14 more states have sought or won permission from the Trump administration to add such requirements to Medicaid that would apply largely to adults added since 2014 under an expansion authorized by the Affordable Care Act.

It’s the second time Kentucky’s case has come before Boasberg, which he noted in his opinion, writing, “The bell now rings for round two.” He rejected a virtually identical plan last year and sent it back to federal officials for further review.

In Wednesday’s bluntly worded opinion, Boasberg said Kentucky again had failed to prove its changes would advance a central goal of Medicaid — to ensure health coverage to its most vulnerable citizens. Rather, he said, it appears at least 100,000 Kentuckians stood to lose health coverage under the work rules.

As he did last year, the judge sent Kentucky’s plan back to the U.S. Department for Health and Human Services for further review. But he indicated he was doubtful the federal agency could justify approving it a third time “given a second failure to adequately consider one of Medicaid’s central objectives.”

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Boasberg also was not persuaded by Bevin’s claim that he could shut down the entire Medicaid expansion and end health coverage for nearly 500,000 people, comparing it to the threat “of a gun to the head.”

“Kentucky, it now seems, has picked up that gun by threatening to de-expand Medicaid,” Boasberg wrote in his opinion.

The ruling is a major setback for the Bevin administration, where officials have been working for more than two years to create sweeping changes to the state’s $11-billion-a-year program that provides health coverage to nearly 1.4 million Kentuckians.

The changes would have affected many of the about 450,000 people added under the 2014 Medicaid enacted by Bevin’s predecessor, Gov. Steve Beshear, a Democrat. Bevin, a Republican elected in 2015, came into office highly critical of the expansion, pledging to scale it back and add more personal responsibility through changes under a federal “waiver.”

Democrats who opposed Bevin’s plan were quick to respond to Wednesday’s ruling.

“This is a great decision, and my hope is that it finally puts this unnecessary waiver behind us,” said Rep. Joni Jenkins, a Shively Democrat and House minority whip. “The facts are clear: The Medicaid expansion has saved lives, it has improved our overall collective health, and it has added billions of dollars to our economy. It is a win for everyone involved.” 

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It’s also a clear signal to other states that have followed Kentucky in seeking federal permission to add “community engagement” rules requiring people to prove they are working or volunteering in order to keep Medicaid health coverage.

Seven other states have been approved for Medicaid work requirements and seven more have applications pending with the federal government, which provides most of the funding for and oversees the program, according to the Kaiser Family Foundation.

Officials in many states, largely led by Republicans, seek to add work requirements arguing they will make people more responsible and engaged in their communities.

Advocates in both Kentucky and Arkansas say the majority of low-income adults covered by Medicaid already work but are employed in part-time or in low-wage jobs that don’t come with health coverage or sufficient hours to meet state reporting requirements. 

Kentucky’s rules require people to put in at least 80 hours a month in work, volunteering, attending school or other activities it considers “community engagement.”

Bevin, an ally of the Trump administration, has said the changes will make people better consumers of health care and become more engaged in their communities.

Bevin has relied on his now-familiar story of growing up poor and having a life of hard work in New Hampshire with no health coverage to explain his desire to give “able-bodied” people on Medicaid the dignity of work.

“This is a program that will allow people to rise up out of poverty,” he said in January 2018, announcing his plan had been approved by the Trump administration.

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Kentucky was the first state to win federal approval to add work requirements and other rules for some people covered by Medicaid, but Arkansas was the first to enact them.

The ruling follows back-to-back arguments on the Kentucky and Arkansas plans before Boasberg on March 14.

In Kentucky’s case, health law advocates argued Bevin’s plan would cause “irreparable harm to the poorest and most vulnerable” Kentuckians and cause thousands to lose coverage. They filed the lawsuit challenging it Jan. 14.

Noting that Boasberg previously rejected the Trump administration’s approval of Bevin’s plan as “arbitrary and capricious,” the lawyers had asked the judge to permanently reject Kentucky’s effort to enact what they say is a virtually identical effort to overhaul Medicaid in the state.

When Kentucky first expanded Medicaid in 2014, the federal government paid 100 percent of the costs of the expansion, an amount that will be gradually reduced to 90 percent by 2020. The federal government pays about 80 percent of Kentucky’s overall Medicaid costs of $11 billion a year, which includes low-income adults, coverage for disabled individuals, about 600,000 children and many elderly people in nursing homes.

Deborah Yetter: 502-582-4228; dyetter@courierjournal.com; Twitter: @d_yetter.

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