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Biden’s effort to unilaterally undo states’ approved work requirements hits a hiccup.
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Republican-led states plan to challenge rollback following last-minute Trump administration agreements
The Biden administration wants to roll back some states’ requirements that Medicaid recipients work in exchange for government relief, but its task may be complicated by moves in the final weeks of the previous administration to lock in the requirements for months.
The Republican Trump administration supported work requirements, calling them a way to move people out of the program and into jobs with employer-sponsored health coverage. Typically, a beneficiary has to work 20 or more hours a week, or perform community service or participate in education or job training, in order to get or keep their health insurance.
Democrats say the states’ work requirements run counter to Medicaid’s status as a guaranteed benefit for the low-income and disabled people who qualify for the federal-state health program. Kentucky, Arkansas and Nebraska are among the 12 states that received Trump administration approval to impose work requirements, though some plans were blocked by the courts.
Just weeks before President Biden took office, the Trump administration urged states in a Jan. 4 letter to sign agreements that would preserve work requirements in the program for nine months before they could be undone by the federal government.
The letters say the Centers for Medicare and Medicaid Services, the federal agency that oversees the program, must go beyond offering states a hearing to contest changes, as is typically the case, and instead follow a longer, nine-month process for revoking the arrangements. An HHS spokesman said 17 states signed the agreements, including Georgia, Tennessee and Arkansas.
Republican leaders in the states, having signed those agreements, say work requirements should be binding until September. Some state officials say they are examining whether the agreements signed in January give them legal grounds for challenging the Biden administration’s action
“Arkansas negotiated in good faith with the last administration over nearly a year for its work requirements, which helps lift Arkansans out of poverty,” said Sen. Tom Cotton (R., Ark.).
“President Biden revoked the program without warning,” Mr. Cotton added, “making unilateral decisions for Arkansas voters from D.C. even before fully staffing his administration.”
Mr. Biden recently signed executive orders directing government agencies to re-examine Trump-era healthcare policies, moves that were expected to lead to the unraveling of initiatives such as Medicaid work requirements and short-term health plans. The orders specifically called for agencies to re-examine rules and policies that limit access to healthcare, including pilot programs to alter Medicaid and waivers that let states change the program, such as adding work requirements.
Meanwhile, the Supreme Court may soon weigh in on the issue. Justices are set to consider appeals by Arkansas and New Hampshire over whether the government’s approval of the work arrangements during the Trump administration is legal, following lawsuits by residents of each state. The Biden administration has asked the Supreme Court not to hear the case, and ended the Justice Department’s defense of the requirements that began under the previous administration.
The Biden administration is seeking to withdraw the requirements before the court is set to hear the case this spring. CMS, meanwhile, said in letters to states in February that it wouldn’t uphold agreements made with the Trump administration granting a nine-month reprieve.
Arkansas in 2018 imposed work requirements for seven months, but a lower court struck down the mandate and an appeals court upheld the ruling. Arkansas appealed to the Supreme Court.
Dennis Smith, a senior adviser for Medicaid and Health Care Reform in Arkansas, part of a state agency, said the Biden administration could choose not to approve new work requirements, but revoking a program that was approved by the previous administration and took months of planning was unfair.
“This is really rewriting the relationship between the federal government and states, and everybody has to be really concerned,” Mr. Smith said. “Once you start down that path, where does it stop? States need stability and predictability.”
A spokesman for the Department of Health and Human Services, which includes CMS, said, “Medicaid’s primary objective, as set out by Congress, is to provide medical assistance to serve the health and wellness needs of our nation’s vulnerable and low-income individuals and families—based on need, not based on one’s ability to find work.” He added, “This is not the time to experiment with policies that risk a substantial loss of health coverage or benefits, especially for communities significantly impacted by Covid-19 and other health inequities.”
In Nebraska, ending the work requirements could potentially strip some beneficiaries of certain benefits, state officials said. The state required newly eligible adults to meet certain work and other requirements to get dental and vision coverage that aren’t traditionally covered by the Medicaid program.
Nebraska state officials said the Biden administration should be reviewing Medicaid changes on an individual basis and not reject innovations.
“Nebraska will be making the case for why federal approval of our program should stand,” said Taylor Gage, a spokesman for Republican Nebraska Gov. Pete Ricketts.
Georgia’s program was designed so that lower-income people previously not eligible for Medicaid could get coverage if they met work or related requirements, and state officials said rescinding the approval would deprive coverage to future enrollees. The program has been set to begin July 1, and the state is bound by legislative statute from adopting the Affordable Care Act’s Medicaid expansion. Georgia officials said they plan to argue to maintain their program.
CMS will work with Georgia and Nebraska to explore opportunities for covering the same people, an HHS official said. CMS said it would consider whether the programs promote Medicaid’s objectives before making any decisions.
The new administration’s quick action to start rolling back the agreements is partly a legal maneuver, some legal analysts said, since waiting nine months before revoking them would keep the Supreme Court case alive.
These analysts said the administration would prefer to leave the question of the programs’ legality—and whether Medicaid’s purpose is to provide health insurance or improve the health of its beneficiaries—out of the hands of the Supreme Court.
A decision that defines Medicaid’s purpose solely as providing health coverage could limit the administration’s ability to approve new proposals from states, such as programs that use Medicaid funding to help with housing or transportation, or incentivizing people to participate in wellness programs.
“It would limit the agency’s discretion and could come back to hurt the Biden administration,” said Nicholas Bagley, a health law professor at the University of Michigan.
The Biden administration has asked the Supreme Court to vacate the earlier D.C. Circuit Court of Appeals decision saying the purpose of Medicaid was to provide health insurance.
The administration’s initial steps to end Medicaid work requirements were cheered by advocacy groups and Democrats who say work requirements reduce access to health coverage.
More than 18,000 beneficiaries in Arkansas lost health coverage in the seven months work requirements were in place in 2018, according to state data. Arkansas state officials said the numbers of disenrollment are due to traditional churn in the program, and that other states without work requirements have had higher numbers of people who have been disenrolled.
