Problems with the rollout of a work requirement for Arkansas' Medicaid program show why states should be allowed to test such mandates through experimental waivers, federal officials argued Thursday.
In a filing with an appeals court in Washington, D.C., the officials referred to a federal judge's observation on the small number of Arkansas enrollees who had used a state website to report hours of work or other qualifying activities, such as volunteering or looking for a job.
U.S. District Judge James Boasberg noted in the March ruling that only 12.3% of enrollees who didn't qualify for an exemption in October had used the website to report hours or were considered in compliance because they were on food stamps and met that program's work requirement.
"That very low reporting rate suggested a problem with the reporting system rather than with the underlying requirements," attorneys with the U.S. departments of Justice and Health and Human Services said in the filing.
The attorneys noted that a similar mandate approved for Kentucky's Medicaid program would not have required enrollees to use a state website and that Arkansas in December gave enrollees the option of reporting over the phone.
Arkansas' experience "underscores the value of testing experiments at the local level -- where changes can be made very quickly -- before policies are established nationwide," the attorneys wrote.
The attorneys made the filing in support of President Donald Trump's administration's appeal of Boasberg's rulings in federal court in Washington, D.C., that struck down Medicaid work requirements in the two states.
Attorneys with Arkansas Attorney General Leslie Rutledge also filed a brief in support of the appeal on Thursday.
Boasberg ruled that the administration exceeded its authority in approving the requirements because it failed to consider how they would affect the Medicaid law's goal of providing health coverage to needy people.
Arkansas' requirement, which was phased in starting in June 2018, resulted in 18,164 enrollees losing their coverage for noncompliance.
In their appeal, lawyers for the administration and the two states say the requirement is designed to make the Medicaid program more financially sustainable by encouraging recipients to get jobs and move off public assistance.
They also argue that research has shown a correlation between employment and improved health, a link that work requirement opponents dispute.
In Thursday's filing with the U.S. Court of Appeals for the District of Columbia Circuit, Trump administration attorneys said similar requirements for the federal food-stamp and welfare programs were tested in states before being enacted nationwide in the 1990s.
Those experiments were allowed under Section 1115 of the Social Security Act, the same provision used by the Trump administration to approve the Medicaid work requirements in Arkansas and Kentucky, the attorneys wrote.
The attorneys also argued that the expansion of Medicaid under the 2010 Patient Protection and Affordable Care Act was "itself the offspring of Section 1115 waivers that allowed States to provide coverage to expansion populations -- the expense of which was often financed by reduced benefits and/or increased cost sharing for Medicaid beneficiaries."
To meet Arkansas' work requirement, Medicaid recipients had to spend 80 hours a month on work or other approved activities, unless they qualified for an exemption, and report what they did using a state website or over the phone.
Those who failed to meet the requirement for three months during a year were kicked off the program and barred from re-enrolling for the rest of the year.
The requirement applied to enrollees in Arkansas Works, which covers people who became eligible for Medicaid when the state expanded it in 2014 to cover people with incomes of up to 138% of the poverty level.
This year the income cutoff is $17,236 for an individual or $35,535 for a family of four. More than 242,000 were enrolled in the program as of July 1. Most enrollees receive the coverage through private plans, with the Medicaid program paying most or all of the premium.
Attorneys with Rutledge's office argued in their brief Thursday that U.S. Health and Human Services Secretary Alex Azar did consider the loss of health coverage that might result from Arkansas' work requirement, but concluded any loss would be small.
"Perhaps a different Secretary would have reached a different conclusion based on the same evidence, perhaps even agreeing with the plaintiff-appellees' view of the evidence," the attorneys wrote. "But it was at least reasonable for the Secretary to make the prediction that he did -- particularly in approving an experimental demonstration project."
The lawsuits challenging the requirements in Arkansas and Kentucky were filed by advocacy groups on behalf of several Medicaid recipients in each state. Final briefs in the administration's appeal are due Aug. 1.
According to the San Francisco-based Kaiser Family Foundation, a health-policy research organization, seven other states also have received federal approval to add work requirements to their Medicaid programs.
One of those states, New Hampshire, suspended its requirement last month after more than two-thirds of the enrollees subject to the requirement were found to be out of compliance.
Indiana began implementing its requirement this year, but the first recipients aren't scheduled to lose coverage for noncompliance until next year. The requirements in the other five states have not yet taken effect.
Metro on 07/19/2019