- A federal judge on Friday invalidated the CMS approval of a Medicaid waiver tying program benefit eligibility to work requirements, calling into question whether or not the state considered how the mandate could impact the goals of Medicaid and health of its population.
- Kentucky became the first state to receive such a waiver to test work requirements in January, after the Trump administration encouraged states to apply for such waivers.
- HHS Secretary Alex Azar "must adequately consider the effect of any demonstration project on the state’s ability to help provide medical coverage," U.S. District Judge James Boasberg wrote in his ruling. "He never did so here."
The ruling is a setback for the Trump administration's aim to allow more states to tie Medicaid benefits to work requirements through waivers.
CMS has approved four state Medicaid waivers which include work requirements: Kentucky, Arkansas, New Hampshire and Indiana.
Seven states are awaiting approval for Medicaid waivers which include work requirements.
The "decision is disappointing. States are the laboratories of democracy and numerous administrations have looked to them to develop and test reforms that have advanced the objectives of the Medicaid program," CMS Administrator Seema Verma said in a statement in response to the ruling.
"We are conferring with the Department of Justice to chart a path forward. In the meantime, we will continue to support innovative, state-driven policies that are designed to advance the objectives of the Medicaid program by improving health outcomes for thousands of low-income Americans," she added.
The five-year demonstration project was set to begin on July 1. Kentucky estimated the project would reduce its Medicaid population by about 100,000 recipients and will save $2.4 billion.
A recent Kaiser Family Foundation report predicted 1.4 million to 4 million individuals would lose health coverage if work requirements were scaled nationally to the Medicaid program.
The ruling is expected to be appealed. The challenge states and the federal government now face is drawing a clear line between work requirements and the health benefits to its populations.