“You [Don’t] Got to Have a J-O-B If You Want to Be With Me”
Becerra v. Gresham
950 F.3d 93 (D.C. Cir. 2020),
cert. granted, 141 S. Ct. 890 (2020)
Arkansas v. Gresham
2020 WL 2621222 (D.C. Cir. May 20, 2020),
cert. granted, 141 S. Ct. 890 (2020)
Oral argument was previously scheduled for March 29, 2021, but has been removed from the calendar pending further order from the Court.
Issue: Whether the Secretary’s approval of Medicaid demonstration projects in Arkansas and New Hampshire that condition health insurance coverage on satisfying work requirements was arbitrary and capricious, in violation of the Administrative Procedure Act.
The expansion of Medicaid in the Patient Protection and Affordable Care Act (ACA) was a watershed moment for millions of low-income older adults and people with disabilities and chronic conditions. Through Medicaid expansion, people between the ages of 19 and 64 who have incomes at or below 138% of the federal poverty level and who are not considered “disabled” under Medicaid law can qualify for Medicaid if their state expands its program.
These consolidated cases stem from the January 2018 announcement of a new policy by the Centers for Medicare and Medicaid Services (CMS) that, for the first time, allowed states to condition Medicaid eligibility on working or participating in a “community engagement” program. These work requirements were permitted under the waiver provision of Section 1115 of the Social Security Act, which grants the Secretary of the U.S. Department of Health and Human Services (HHS) the authority to waive a state’s compliance with certain requirements of the Medicaid Act only for an “experimental, pilot, or demonstration project” likely to help promote the objectives of the Medicaid Act.
Arkansas and New Hampshire were among the first states to receive approval for their waivers, which included work requirements for the Medicaid expansion population. The Arkansas demonstration waiver program, known as Arkansas Works Amendments, requires people between the ages 19 and 49 to prove that they worked or volunteered for 80 hours per month (with some exemptions) or lose Medicaid eligibility. Gresham v. Azar, 363 F. Supp. 3d 165, 171–72 (D.D.C. 2019). Those who failed to provide documentation for three months in a calendar year lost coverage for the rest of the calendar year. Id. at 172.
The New Hampshire demonstration project, called the Granite Advantage Health Care Program, conditioned Medicaid coverage for most non-disabled adults ages 19 to 64 on completion of 100 hours per month of work or other community activities. Philbrick v. Azar, 397 F. Supp. 3d 11, 18 (D.D.C. 2019). Those who did not comply were required to make up hours, prove they fell within an exemption, or lose coverage. Id.
Arkansas and New Hampshire each faced challenges in implementing their waivers. When Arkansas implemented its waiver, more than 18,000 beneficiaries lost coverage. A review of the program found that over 95 percent of people who lost coverage were either working or qualified for an exemption.
Similarly, within the first month of New Hampshire’s attempt to implement Granite Advantage, approximately 17,000 non-exempt beneficiaries had not documented their compliance. NH Medicaid Granite Advantage Program Update: Work and Community Engagement Requirements Temporarily Suspended, Univ. of New Hampshire (July 19, 2019). As a result, New Hampshire paused implementation of the work requirement. The State acknowledged in a July 2019 letter that the roll-out efforts were unsuccessful and that enforcement would “more likely than not lead to persons losing coverage.”
Medicaid beneficiaries in Arkansas, Kentucky, New Hampshire, Indiana, and Michigan challenged HHS’s approval of their state work-requirement waivers in separate cases in federal district court. See Gresham, 363 F. Supp. 3d at 165 (D.D.C. 2019) (Arkansas); Stewart v. Azar, 308 F. Supp. 3d 239 (D.D.C. 2018) (Kentucky); Philbrick, 397 F. Supp. 3d at 11 (New Hampshire); Complaint, Rose v. Azar, 1:19-cv-02848 (D.D.C. Sep. 23, 2019) (Indiana); Complaint, Young v. Azar, No. 1:19-cv-03526 (D.D.C. Nov. 22, 2019) (Michigan). The Arkansas beneficiaries claimed that the Secretary’s approval of these waivers violated the Administrative Procedure Act. Gresham, 363 F. Supp. 3d at 168-69. They also claimed that the waivers placed them in danger of losing Medicaid, and, thus, access to needed health care. Id. at 174. The district court agreed with them, finding that the federal government could not approve changes to state Medicaid programs that are inconsistent with the core objective of the Medicaid program: to furnish medical assistance to low-income people and people with disabilities. Id. at 181. The district court reached the same conclusion regarding the New Hampshire program. Philbrick, at 11.
The federal and state defendants appealed the district court’s decisions concerning the Arkansas and New Hampshire programs to the D.C. Circuit Court of Appeals. Gresham v. Azar, 950 F.3d 93 (D.C. Cir. 2020); Philbrick v. Azar, No. 19-5293, 2020 WL 2621222 (D.C. Cir. May 20, 2020). The court of appeals affirmed the lower court’s decisions. Gresham, 950 F.3d. at 233; Philbrick, supra, at *1. Defendants petitioned the Supreme Court to accept the cases for review. Petition for Writ of Certiorari, Azar v. Gresham (No. 20-37). AARP, AARP Foundation, and other organizations filed an amicus brief in support of the Medicaid beneficiaries, explaining how the waivers could harm older adults, people with disabilities, and people with chronic conditions by stripping them of life-changing health care coverage gains.
Following the 2020 election, the federal government changed its position on Medicaid work requirements. On February 12, 2021, CMS sent letters to Arkansas, New Hampshire, and other states with previously approved demonstration projects informing them that it had preliminarily determined that allowing work-related requirements would not promote the objectives of the Medicaid program and was in the process of determining whether to withdraw approval of those requirements. Given these developments, the Court has paused the case.
HHS withdrew its approvals of the waivers in New Hampshire and Arkansas on March 17, 2021. Arkansas and New Hampshire filed administrative appeals. The cases are ongoing.
WHAT’S AT STAKE
Access to health care hangs in the balance for millions of older adults and people with disabilities and chronic conditions. Prior to Medicaid expansion, people who could not afford health care coverage paid a human toll. This toll included not being able to access health care despite being sick or injured, not being able to fill their prescriptions because they could not afford them, dying from diseases that are treatable if discovered early, and plunging into debt and even bankruptcy when they had to pay out of pocket for health care in a crisis. Now, with 38 states and the District of Columbia expanding Medicaid, millions of adults with low income finally have access to the life-sustaining health care coverage they need. As a result, their health and financial conditions have vastly improved.
A decision upholding the waivers would threaten to erase these significant gains, should a future administration approve similar projects. Millions of people in the expansion population would once again find themselves at risk of losing health care coverage. The significant burden of the coverage losses would fall on people ages 50 to 64 and on younger beneficiaries with chronic conditions or functional impairments. Despite their categorization as “able-bodied,” these populations often face significant health-related challenges that can affect employment. Moreover, even people who meet the program eligibility requirements could still lose coverage because of the administrative barriers they must overcome to prove their compliance.