- Georgia is suing the Biden administration over its decision to roll back Trump-era approval of a work requirement in the state's plan to expand Medicaid coverage.
- The lawsuit, filed Friday in a district court, alleges CMS' decision last month was illegal and a "bait and switch of unprecedented magnitude that would eviscerate the contractual terms at the heart of a carefully negotiated federal-state program."
- Georgia is seeking a court order reinstating the original plan, including the work requirement.
Tying Medicaid coverage for low-income Americans to work or volunteering hours was a dream for conservatives, and one that the Trump administration made a key prong of its healthcare agenda. The goal was to incentivize work, while eventually moving Medicaid beneficiaries to private coverage. But despite a flurry of federal approvals, no state work requirements were active at the dawn of the Biden administration, having run into numerous legal and administrative challenges even prior to the pandemic.
But with the new suit against CMS, HHS and other parties within the administration, Georgia is looking to revitalize its Medicaid work requirements.
"This case is about whether the federal government must keep its promises," the lawsuit reads.
Creation of the plan, called Georgia Pathways to Coverage, followed the passage of legislation in 2019 giving the Georgia Department of Community Health the authority to expand Medicaid to previously ineligible families for the first time. It would allow Georgians with incomes of up to 100% of the federal poverty level to enroll in Medicaid, a far less generous threshold than the 138% cutoff under the Affordable Care Act.
Enrollees would also have to pay premiums and be employed at least 80 hours per month to maintain their coverage.
The Trump administration approved the state's demonstration project in October 2020, with CMS confirming on January 4, 2021 — just two weeks before President Joe Biden's inauguration — that Georgia Pathways reflected a binding contract between the state and the federal government.
But following the change in administrations, CMS sent Georgia a letter noting it was reconsidering the Trump administration's approval of Georgia Pathways, saying the plan was inconsistent with the objective of Medicaid — to expand coverage for the poor.
On Dec. 23, CMS formally rescinded its approval of the qualifying hours and premium requirements portions of Georgia Pathways, while leaving the remaining part of the demonstration expanding coverage in place.
Gov. Brian Kemp, a Republican, accused the Biden administration of altering the plan beyond recognition with its decision to rescind core elements of the program in a statement on the lawsuit. The governor said the administration was cherry-picking individual elements motivated by politics, not policy.
"Simply put, the Biden administration is obstructing our ability to implement innovative healthcare solutions for more than 50,000 hardworking Georgia families rather than rely on a one-size-fits-none broken system," Kemp said Friday.
"Because Section 1115 demonstration projects represent a contract between States and the federal government, and because CMS's actions reflect paradigmatic arbitrary and capricious decisionmaking, this Court must vacate CMS’s attempt to renege on its promise and unilaterally rewrite the terms of the program," the lawsuit argues.
Over its tenure, the Trump administration greenlit demonstration waivers from a number of states for work requirements, though few were actually put in place, as judges across the country halted or struck down their implementation. Some states also paused implementation of scheduled work requirements programs to free up resources in the early days of COVID-19.
Overall, 12 states received federal approval to test work requirements between 2018 and 2021.
Liberals generally oppose work requirements, viewing them as a strategy to pare down Medicaid rolls without corresponding improvements or even cost savings.
The programs have also faced severe criticism from policy experts, patient advocates, hospitals and even government watchdogs for a slew of reasons.
Work requirements could weaken hospital finances, as the loss of Medicaid enrollees would reduce hospital Medicaid revenue and put pressure on operating margins. They also result in skyrocketing administrative costs for the state, while curtailing care access for low-income Americans.
For example, in Arkansas — the only state that began disenrolling beneficiaries for not meeting work requirements before halting its program — about a quarter of beneficiaries subject to the policy lost coverage in its first five months.
The Kaiser Family Foundation has estimated if work requirements were scaled nationwide, between 1.4 million and 4 million people would lose coverage. Many would be found ineligible not because they don't meet hourly requirements, but because they're unable to report their hours due to a lack of access to technology, researchers have found.
That's of particular concern in Georgia, which has one of the highest uninsured rates in the country at about 14%.
It's one of 12 states that have yet to adopt Medicaid expansion under the ACA. A full Medicaid expansion in the state would provide coverage to roughly 450,000 more Georgians, according to one estimate.
The Biden administration is also separately reviewing another play from Georgia to revamp its health insurance system previously approved by the Trump administration. The waiver is looking to dismantle the state's use of the federal insurance marketplace Healthcare.gov, without replacing it with a state-based marketplace.
Instead, people would shop for federally subsidized health insurance through a handful of private sites, decentralizing marketplace functions. Policy experts have raised concerns that would result in a fragmented enrollment system, undermining protections for people with preexisting conditions and potentially causing tens of thousands to lose coverage in Georgia.