In another setback for the Trump administration’s plan for the Medicaid program, a federal appeals court ruledlast week that Arkansas cannot impose onerous work and reporting requirements on Medicaid recipients as a condition of receiving coverage. In its decision, a three-judge panel of the D.C. Court of Appeals unanimously rejected the administration’s claim that work requirements promote a primary objective of Medicaid.

The state’s plan has been on hold since March 2019, when a federal court in Washington, D.C. found the administration’s approval of Arkansas’ waiver to be “arbitrary and capricious.” Federal law allows states a great deal of administrative flexibility to try  “experimental, pilot, or demonstration” projects that are likely to promote Medicaid’s primary objective. Though the administration deemed Arkansas’ project to be in compliance with these guidelines, both courts disagreed, finding that “the principal objective of Medicaid is providing health care coverage,” and work requirements do not promote this goal. The courts agreed that the administration should have considered the demonstration’s impact on access to Medicaid but failed to do so. In the project’s first six months, over 18,000 Arkansans were kicked off the state’s Medicaid rolls.

Federal officials have not yet said whether they will appeal the ruling to the Supreme Court.

In a statement, the Centers for Medicare & Medicaid Services, the federal agency which oversees Medicaid, said it “is reviewing and evaluating the opinion and determining next steps. CMS remains steadfast in our commitment to considering proposals that would allow states to leverage innovative ideas.”

The National Health Law Program, Legal Aid of Arkansas, the Southern Poverty Law Center, and Jenner & Block represented the Medicaid enrollees affected by the Arkansas waiver project.

Friday’s decision applies only to Arkansas, but similar requirements have either been proposed or are underway in another 20 states. Some states have paused their programs citing ongoing litigation.

Medicare Rights continues to oppose efforts to restrict access to Medicaid coverage, including through burdensome and unnecessary conditional requirements. The evidence is clear — such rules leave more people uninsured, fail to move people out of poverty, and do not eliminate the need for health coverage. Nor are they needed. A large majority of adults with Medicaid are already working. Among those who are not, most report significant barriers to employment such as illness, disability, or retirement. As a result, these type of barriers often disproportionately harm people who are nearing Medicare eligibility and others who are already having difficulty finding and maintaining work.

The Medicaid program was designed to provide health coverage to people who are struggling to afford care. Conditioning this coverage on compliance with punitive work requirements and bureaucratic tasks does nothing to advance this statutory goal. We are relieved the courts continue to recognize the program’s lawful purpose, and we urge the Trump administration to do the same.

Read the decision

Read about the risks of work requirements for older adults.