Court Strikes Down Work Requirements In Arkansas And Kentucky

Author:Mr Christian Springer
Profession:Foley Hoag LLP

There's a saying that one should work hard in the present to reap the rewards later in life. But should one need to work to qualify for Medicaid?

In a week of legal machinations and legal setbacks on the health care front for the Trump Administration, Judge James E. Boasberg's opinion in Gresham v. Azar suggests that the answer is no, at least as the question was posed by the Secretary of the Department of Health and Human Services (HHS) and the state of Arkansas. Gresham v. Azar marks the second rebuff of the Trump Administration's attempts to defend work requirements for Medicaid in federal court.

The Gresham case joins the same court's 2018 decision in Stewart v. Azar (Stewart I), which vacated and remanded a similar section 1115 waiver proposal from Kentucky. Notably, the Gresham case was also issued along with Stewart v. Azar II, which vacated and remanded Kentucky's second attempt to impose work requirements in Medicaid. Throughout its opinion, the court extensively discusses the factual parallels between Gresham and Stewart I to support arriving at the same conclusion: that the Secretary's approval of the Arkansas demonstration project proposal was arbitrary and capricious because the Secretary did not adequately determine the proposal's potential impact on Medicaid coverage. Unlike in Stewart I, however, where the Kentucky demonstration project had not yet taken effect, the Arkansas demonstration project has been in effect since June 2018.

Notwithstanding, and given the deficiencies that the court identified in the Secretary's approval of the Arkansas demonstration project, the court's opinion completely vacates and remands the Arkansas project, stating that "the probable disruptions are not so significant as to require deviation room the ordinary rule of vacatur." The two opinions are a significant setback for the Trump Administration, which has made work requirements in Medicaid a lynchpin of its Medicaid policy.


Before discussing the court's analysis in Gresham, it may be helpful to understand some of the key features of the Arkansas Medicaid demonstration/waiver proposal at the heart of the legal battle.

As we have written in the past, section 1115 of the Social Security Act allows states to deviate from the otherwise-applicable Medicaid program rules in order to test demonstration projects that, in the opinion of the Secretary of HHS, "promote the objectives" of the Medicaid program. Going back at least to the...

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