Administrator of the Centers for Medicare and Medicaid Services Seema Verma listen at right as President Donald Trump speaks during a meeting in the Roosevelt Room of the White House in Washington, March 22, 2017. The Trump administration says it's offering a path for states that want to seek work requirements for Medicaid recipients, and that's a major policy shift toward low-income people. Credit: Evan Vucci | AP

On July 1, Kentucky planned to subject thousands of low-income residents who receive health coverage through the state’s Medicaid program to work requirements. They would risk losing coverage if they didn’t work, volunteer or enroll in job training for at least 80 hours a month. They would have to start paying premiums and face more stringent requirements for reporting any changes in income.

The state projected 95,000 people would lose their Medicaid coverage as a result of the policy change.

Kentucky expected to be a trailblazer. Armed with the Trump administration’s approval, it was to become the first state to implement work requirements in its Medicaid program. A handful of others — Arkansas, Indiana and New Hampshire — are expecting to follow suit in the coming months. Additional states, including Maine, are waiting for the federal government’s OK to begin imposing work requirements.

But a federal judge rained on Kentucky’s trailblazing parade just two days before the work requirements were to take effect. In a June 29 decision, U.S. District Court Judge James Boasberg ruled that the Trump administration’s approval of Kentucky’s work requirements was invalid.

Boasberg’s ruling was 60 pages long, but the crux of it was really quite simple: Kentucky’s Medicaid work requirements do nothing to advance the core Medicaid objective of providing people with medical assistance.

Kentucky sought permission to implement work requirements by applying to the Trump administration for a waiver from the Medicaid law’s usual requirements. The administration granted that waiver in January.

The administration has wide latitude to grant state’s such waivers so they can experiment with new approaches to administering Medicaid and delivering health benefits. The waivers, however, are only allowed if they are “likely to assist in promoting the objectives” of the broader Medicaid program.

Attaching work requirements to Medicaid as a demonstration project fails that test, Boasberg concluded. After all, one of Medicaid’s key objectives is “making medical assistance available” to the targeted populations. And in deciding whether to approve Kentucky’s waiver request, the judge noted that the Trump administration never considered how many people would lose health coverage as a result of the waiver.

“This oversight is glaring,” Boasberg wrote in his ruling.

“[T]he record shows that 95,000 people would lose Medicaid coverage, and yet the Secretary paid no attention to that deprivation,” he wrote in another section.

Boasberg noted that one argument from the Trump administration in favor of approving Kentucky’s work requirements was that employment can improve people’s health. That’s not the same, however, as providing medical assistance, which means paying people’s medical bills.

“[T]his focus on health is no substitute for considering Medicaid’s central concern: covering health costs,” Boasberg wrote.

The Trump administration hasn’t yet given Maine the go-ahead to impose work requirements. But Maine’s application seeking approval to impose them projects that, by 2022, nearly 4,600 people would lose coverage due to the work requirement policy who might otherwise have retained it.

Those are the LePage administration’s projections for coverage loss, so the loss of coverage could be even greater. (The projections don’t factor in the expansion of Medicaid that voters approved last year but that the LePage administration is thwarting.)

In addition, “providing medical assistance” is nowhere among the primary goals the LePage administration has outlined for imposing work requirements.

By pointing out that Medicaid’s primary objective is to pay the health care bills of people in need, Boasberg has made the Trump administration’s decision making on work requirements remarkably easy.

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