KY Gov Threatens To Strip Medicaid From 500,000 If Court Strikes Work Rules

Attorneys for Kentucky Gov. Matt Bevin (R) will tell a federal court this Friday that that the governor plans to take his ball and go home if he can’t get his way on Medicaid work requirements, premiums, and other restrictions. Bevin, who campaigned on ending the Medicaid expansion but backed down from that threat once elected, is now arguing that he will scrap the state’s Medicaid expansion if the controversial new rules are struck down by federal courts.

Kentucky was the first state in the nation to win permission from the Trump administration to impose the new Medicaid rules, which are expected to throw nearly 100,000 Kentuckians off the program. With at least a dozen other states looking to adopt their own Medicaid work requirements, the outcome of the case could determine the future of the program not only in Kentucky but across the country.

Kentucky and the Trump administration are jointly fighting a lawsuit from a dozen-plus Kentucky residents who fear the work requirements and other hurdles will strip them of their Medicaid coverage. The plaintiffs are arguing, among other points, that the new rules do not further Congress’ original intent for Medicaid — to provide affordable health care to low-income people.

Kentucky’s waiver will allow the state to deny coverage to any non-disabled adult who cannot prove they are working at least 20 hours per week. The state also will be able to charge low-income Medicaid recipients health care premiums, eliminate full coverage of dental care, vision services, and over-the-counter medications for many adults, end retroactive Medicaid coverage, and implement a six-month lockout period for people who fail to re-enroll in time or report a change in income.

In the state’s legal filings, Kentucky responds that the challengers don’t have legal standing because they can’t prove they will be harmed by the new rules, which are set to go into effect in July. The state additionally says the lawsuit should be thrown out because Bevin’s promise to scrap the Medicaid expansion entirely if he loses in court means that the challengers’ claims are not “redressable” — essentially, they’re screwed and will lose their Medicaid coverage no matter which way the court comes down.

“Governor Bevin has made it unmistakably clear that Kentucky will withdraw from expanded Medicaid if this case ultimately succeeds in invaliding Kentucky HEALTH,” the state’s reply brief states. “In fact, he has given that conclusion the force of law.”

That “force of law” is an executive order Bevin signed in January that would trigger the termination of Kentucky’s Medicaid expansion within six months if the work requirements waiver is blocked by courts and all appeals are exhausted, meaning that about half a million people would lose their health coverage.

“No matter how much Plaintiffs want expanded Medicaid and no matter how hard they work to keep it, that ultimate decision is not up to them,” the state’s legal brief asserts bluntly. “That decision is Kentucky’s to make.”

In their own legal briefs leading up to Friday’s oral arguments, the Kentuckians challenging the waiver push back with three main counterpoints. First, they say Bevin may not be able to completely kill the expansion even if he wants to.

“It’s not like he can just snap his fingers and the expansion is done,” said Leonardo Cuello, the director of health policy at the National Health Law Program, one of the organizations representing the plaintiffs in court. “In fact, there are serious questions as to whether he can legally undo the expansion.”

Cuello told TPM that their attorneys also plan to implore the judge not to endorse Bevin’s hostage-taking tactic, arguing that doing so would be “rewarding bad threats.”

“If you were to allow Kentucky to get away with this argument, you’d be saying that anytime someone can come up with a threat worse than the harm the plaintiff is identifying, they can strip away someone’s standing,” he explained. “That sends the message that any government official could avoid lawsuits by saying, ‘If you grant this challenge, we’ll do this other thing that’s even worse.'”

Finally, the plaintiffs counter Kentucky with a somewhat wonky argument based on a past federal case involving housing subsidies. They say that even if the court takes Bevin’s “Medicaid waiver or nothing” threat into account, that should not prevent the court from protecting the plaintiffs from a clearly imminent danger.

“All we need to show is that the waiver is a clear step on the path to injury, and that removing it is necessary to removing the threat of injury,” Cuello said. “Our plaintiff’s claims are redressable, because striking down the waiver would be removing an absolute barrier to them, even if it doesn’t prevent other barriers down the line.”

The arguments over Kentucky’s waiver come as many other states move to implement their own restrictive Medicaid rules. Some, including Michigan, have included a provision similar to Kentucky’s, where any outside threat to the work requirements would trigger the abolition of the entire Medicaid expansion.

Cuello told TPM that those states should think twice before crafting such a set-up, calling it “an irresponsible game of chicken.”

“It’s out of your control whether the Department of Health and Human Services approves the waiver and whether courts strike it down,” he said. “It’d be like saying you’ll terminate the Medicaid expansion if the stock market in Japan dips below a certain threshold.”