3 Arkansans Sue, Calling Medicaid Work Rules Unconstitutional

Three low-income Arkansans with pre-existing health conditions sued the Trump administration on Tuesday for giving their state the go-ahead to impose strict monthly work requirements on Medicaid and restrict the number of months for which the program will retroactively cover the health expenses of new enrollees. More plaintiffs may join the case in the months to come.

The lawsuit argues that the administration’s decision was arbitrary and capricious, violates the Constitution’s “take care” clause, and breaks with the original purpose of Medicaid by putting thousands of residents at risk of losing their insurance coverage.

Nationwide and in Arkansas, the vast majority of Medicaid recipients already work, and most non-working recipients are not able to work, either because of an illness or disability or the scarcity of jobs in their area. Yet the promotion of the rules has been a top priority of the Trump administration, despite data showing that similar requirements in other federal benefits programs failed to increase employment.

In early June, Arkansas became the first state in the nation to implement a Medicaid work requirement, though it was the third to be approved by the Trump administration. The state’s law is also arguably the country’s harshest. If non-disabled beneficiaries fail for three months in a row to prove they are working at least 80 hours each month, they will lose their insurance for the rest of the year. And while the state has the second-worst rate of home internet access in the country, Arkansans can only submit proof of their work hours online.

Just one month in, the system is proving difficult to navigate. Out of 10,304 people in the state subject to the requirement in June, only 445 successfully submitted their work hours on the state’s website. Another 2,395 claimed an exemption, such as having a disability or caring for a relative full-time, leaving 7,464 people at risk of losing their insurance.

Attorney Kevin De Liban with Legal Aid of Arkansas, which is representing the plaintiffs, said the rules are a solution in search of a problem.

“Almost 60 percent of people covered by Medicaid expansion in the state already work, and nearly all the rest either have a disability or look after family,” he said. “These work requirements and the online-only reporting system threaten everyone’s care.”

Liban and the other attorneys challenging the waiver say it violates the Constitution and Congress’ original intent for the Medicaid statute.

“The purpose of the Medicaid program is to help furnish medical care and medical coverage for people. This wavier does nothing to do that,” Leonardo Cuello, director of health policy for the National Health Law Program, told TPM. “It just takes coverage away from people.”

Arbitrary and capricious

The lawsuit, filed in U.S. District Court in Washington, D.C. by the National Health Law Program, the Southern Poverty Law Center and Legal Aid of Arkansas, echoes many of the same arguments from the successful lawsuit that convinced a federal judge to strike down Kentucky’s Medicaid waiver and send it back to the Department of Health and Human Services for reconsideration.

As in Kentucky, the groups challenging the Arkansas waiver say the Trump administration did not adequately consider how many people could lose their insurance due to the work requirement, and how many people would find themselves with medical bills thanks to the state cutting three months of retroactive coverage down to one. And while Kentucky provided the Trump administration with an estimate that more than 90,000 people would be kicked off of Medicaid due to the rules, Arkansas declined to give even a ballpark guess of its waiver’s impact.

Additionally, the lawsuit argues that the Trump administration’s approval of the waiver encroaches on Congress’ power to make health care laws.

“Under the Constitution, the President lacks the authority to rewrite congressional statutes or to direct federal officers or agencies to effectively amend the statutes he is constitutionally required to execute,” the complaint states. “Authorization of work and community engagement requirements is categorically outside the scope of the Secretary’s Section 1115 waiver authority.”

Citing statements by President Trump threatening to “explode” the ACA and statements by his top health officials Alex Azar and Seema Verma criticizing the ACA’s Medicaid expansion and promising to overhaul it, the lawsuit says the actions taken were unconstitutional.

“An effort to undermine the Affordable Care Act by undoing the extension of Medicaid to the expansion population is at odds with the President’s duty to take care that the laws be faithfully executed,” the complaint states.

The lawsuit also accuses the Trump administration of violating federal procedures, noting that Verma’s January letter to state Medicaid directors indicating a willingness to approve work requirements was not submitted for notice and public comment, was not published in the Federal Register, and was released after the public comment period for Arkansas’ waiver had ended.

“CMS had not given the public the ability to comment meaningfully on the pending Arkansas waiver requests in light of the policy change,” the plaintiffs write.

Access denied?

Since Arkansas expanded Medicaid in 2014 under Democratic Gov. Mike Beebe, the state saw the uninsured rate for adults plummet from 22.5 to 9.6 percent, the largest drop in the country. Emergency room visits also decreased by more than 35 percent, and the number of uninsured people admitted to hospitals dropped by more than 45 percent, saving hospitals in the state more than $69.2 million.

Now, the plaintiffs, Charles Gresham, Cesar Ardon, and Marisol Ardon, are all enrolled in Medicaid, and all say they are at risk of losing their insurance under the new rules. Cesar Ardon, for instance, is an outdoor handyman whose work is seasonal and who cannot depend on a set number of work hours each month. He did not meet the 80 hour threshold this June, the first month the rules went into effect, and he also reported struggling with the online portal due to his limited internet access. Gresham, meanwhile, is a fast food worker whose medical problems, including frequent seizures, have cost him several jobs and have made his work schedule unpredictable. He too reported difficulty using the online portal to file his hours.

The complaint describes that in order to qualify for Medicaid under Arkansas’ waiver, enrollees have to jump through several hoops that may prove challenging for those with little web experience. “To use the online portal, enrollees need an email address, a log-in and password unique to the portal, and a reference number provided in a multi-page letter sent by DHS,” the lawsuit said. “Enrollees use the reference number to link their insurance account to the reporting portal. Once the link is established, individuals must click through multiple different screens to report their work activities each month. Moreover, the portal is only accessible to beneficiaries between the hours of 7 a.m. and 9 p.m. Sometimes, DHS schedules online maintenance of the portal during these operating hours.”

Unlike Kentucky’s Medicaid work requirement, which hit hundreds of thousands of adult enrollees at once, Arkansas’ will be slowly phased in, with beneficiaries between 30 and 49 years old subjected first. When the younger and older cohorts are added in, people in those groups who are at risk of losing their insurance could join the lawsuit as additional plaintiffs.

Jane Perkins, the director of the National Health Law Program, said in a statement to TPM that the lawsuit’s goal is “to stop the Trump administration’s attempt to transform Medicaid from a health insurance program to a work program — and, along the way, to end coverage of medically necessary care for thousands of low-income people.”

Read the full complaint below: