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A federal appeals court in Washington upheld a lower court's ruling Friday that put a stop to work requirements for Medicaid recipients in Arkansas.

The requirements, initially struck down March 27 by a federal judge in Washington, D.C., were the first in the nation to be added to a state Medicaid program, and resulted in more than 18,000 Arkansans losing coverage during the nine months they were in effect.

The federal and state governments' appeal of the March 27 ruling was rejected Friday in a 19-page opinion issued by a three-judge panel of the District of Columbia circuit, which called the Arkansas work requirements "arbitrary and capricious."

The panel that affirmed the ruling issued nearly 11 months ago by U.S. District Judge James Boasberg of Washington, D.C., had expressed skepticism about the work requirements during oral arguments in October.

[DOCUMENT: Read the ruling from the panel of the U.S. Court of Appeals »]

Arkansas Gov. Asa Hutchinson, a Republican who supported the requirements that President Donald Trump's administration allowed states to add, said Friday that he hopes the U.S. Supreme Court will review the case.

"The D.C. Court of Appeals ruled that the Medicaid Act does not permit a work requirement for able-bodied recipients even though one of the purposes of the Medicaid law is 'to help families be independent,' " Hutchinson said.

"Arkansas implemented a work requirement in order to help recipients get worker training and job opportunities while receiving benefits," he said. "It is difficult to understand how this purpose is inconsistent with federal law. The court's ruling undermines broad public support for expanded health care coverage for those struggling financially."

The governor said that Arkansas Works, the part of the Medicaid program that Arkansas extended in 2014 as authorized under the 2010 Patient Protection and Affordable Care Act to cover adults with incomes of up to 138% of the federal poverty level, "has expanded access to health care coverage for low-income Arkansans."

He added that, "as it stands, the Arkansas Works program will be less effective in helping recipients gain independence."

Jane Perkins, legal director of the National Health Law Program that helped represent affected Medicaid enrollees, saw it differently.

"We are gratified by the court's ruling today," she said. "It means that thousands of low-income people in Arkansas will maintain their health insurance coverage -- coverage that enables them to live, work, and participate as fully as they can in their communities."

To comply with the requirement, enrollees had to spend 80 hours a month on work or other approved activities, such as volunteering or looking for a job, and report what they did using a state website. In December 2018, the state added an option for enrollees to report their hours by phone.

Those who failed to meet the requirements for three months during a year were kicked off the program and barred from reenrolling for the rest of the year.

The unanimous three-judge appellate ruling, written by Senior U.S. Circuit Judge David Sentelle, found that in approving the project without considering its effect on Medicaid coverage, the U.S. Department of Health and Human Services violated the Administrative Procedures Act.

Perkins commented on the legal justification behind the ruling.

She said Section 1115 of the Social Security Act, which authorizes waivers from federal Medicaid law that the health and human services secretary determines are likely to assist in promoting the objectives of the program, "only allows the secretary to approve experimental projects that further the Medicaid Act's purpose.

"As Judge Sentelle's opinion repeatedly notes," she continued, "the text of the Medicaid Act is clear as to this purpose -- to provide health coverage. The agency was bound by the purpose Congress selected and could not change it as it attempted to do so. Only Congress can do that."

Kevin De Liban, attorney at Legal Aid of Arkansas, which also helped represent affected enrollees, praised the effect the ruling will have on low-income individuals and families.

"The Court recognized the tragic harm that these work requirements have caused for people in Arkansas doing their best to get ahead," Liban said in a news release. "Now, more than 200,000 Arkansans on the program can rest easier knowing that they'll have health care when they need it."

Liban said later that because of the requirement that enrollees had to be out of compliance for three months before losing their benefits, the 18,164 people who lost Medicaid coverage after the requirement took effect actually lost coverage over five of those nine months. He said there are currently 240,000 to 250,000 people on Arkansas Works, and of that number, only the enrollees under age 50 were subject to the work requirement, which leaves about 200,000 people who would be affected by the requirement.

The requirement applied to Arkansans ages 19-49 covered under Arkansas Works.

Elizabeth Taylor, executive director of the National Health Law Program, which was also joined by the Southern Poverty Law Center and Jenner & Block in representing the enrollees, called the ruling "a victory for our plaintiffs, a victory for low-income individuals and families across Arkansas, and a victory for the rule of law."

"We hope the federal government and the states will return to focusing on expanding coverage and access, so that everyone -- regardless of economic status -- can be healthy," said Sam Brooke, deputy legal director for the Southern Poverty Law Center.

Arkansas Attorney General Leslie Rutledge issued a statement Friday saying "I am disappointed in today's decision and am reviewing and discussing next steps with the Department of Justice."

"The effect of this decision," Rutledge said, "is that work and community engagement requirements cannot be enforced, and Arkansas must provide three months of retroactive coverage instead of the one month allowed under the Arkansas Works approval. Beneficiaries who did not comply with the work and community engagement requirements for three consecutive months in 2018 and were removed from the program remain eligible to reapply for coverage through the Medicaid expansion program."

Sentelle, the author of the opinion, was appointed to the appeals court in 1986 by President Ronald Reagan. Joining him on the panel were judges Harry Edwards, appointed in 1980 by President Jimmy Carter, and Cornelia Pillard, appointed in 2013 by President Barack Obama.

Boasberg, whose opinion was affirmed Friday, was appointed by Obama in 2011.

Kentucky, which also expanded its Medicaid coverage in 2014, and whose previous governor, Matt Bevin, threatened to end Medicaid expansion if the work requirement was disallowed, was prevented by Boasberg's ruling from imposing the work requirement. However, the appeals court dismissed Kentucky from the appeal last month after the issue became moot when Andy Beshear, a Democrat, took over the governor's office and dropped the state's request to impose the requirement.

Medicaid is a federal-state program that covers about 70 million people, from pregnant women and newborns to disabled people and elderly nursing home residents.

The Trump administration has allowed states to require able-bodied adults drawing Medicaid benefits to work, volunteer or study. Nearly 20 states are in various stages of trying to implement work requirements.

Information for this article was contributed by The Associated Press.

A Section on 02/15/2020

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