CLEVELAND, Ohio - A federal judge's ruling Friday on a Medicaid waiver in Kentucky will likely delay a decision on a similar work requirement proposed by Ohio.
U.S. District Judge James Boasberg ruled in favor of those challenging Kentucky's waiver in Stewart v. Azar, saying that Secretary of Health and Human Services Alex Azar's approval of Kentucky HEALTH was "arbitrary and capricious."
"The secretary never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid," Boasberg wrote.
That decision puts a hold on Kentucky's planned launch of the new system, but also likely delays the Centers for Medicare and Medicaid Services' (CMS) approval of other waivers, including one submitted by Ohio on April 30.
"My guess is the administration might pause in approving other waivers, including Ohio's, until the Kentucky decision gets figured out," said Rea Hederman, executive director of the Economic Research Center and vice president of policy at The Buckeye Institute, a right-leaning think tank. "I will be a little surprised if they continue to approve the waivers as they have been."
CMS first will likely either appeal the Kentucky ruling or revise its approval of the waiver, he said.
Ohio's waiver requires most able-bodied adults to work or participate in a sanctioned community engagement activity, like Supplemental Nutrition Assistance Program (SNAP) education and training activities, for 80 hours monthly to be eligible for Medicaid. The work requirement includes exemptions for people with severe disabilities, pregnant women, parents, caretakers and Ohio Works First recipients of cash assistance, as well as able-bodied adults living in counties with high unemployment rates, which excludes Cuyahoga County.
A requirement to force recipients to work highlights a debate between if Medicaid should be a temporary welfare program for those facing stints of unemployment or a means to provide long-term healthcare coverage to the country's most vulnerable. The waivers roll back some provisions of the Affordable Care Act, under which Medicaid was expanded in more than 30 states, including Ohio.
Seema Verma, CMS administrator, called the Kentucky ruling "disappointing" and said CMS was "conferring with the Department of Justice to chart a path forward." Verma said her agency would "continue to support innovative, state-driven policies that are designed to advance the objectives of the Medicaid program by improving health outcomes for thousands of low-income Americans."
Melissa Ayers, a spokesperson for the Ohio Department of Medicaid, said her office was "currently reviewing Friday's court decision regarding Kentucky's work requirement program."
"We will continue to work with the federal government throughout the process regarding our proposal," Ayers said.
"I think the court decision does not bode well for Ohio," said Loren Anthes, a public policy fellow at the Center for Community Solutions, a Cleveland think tank. "Rather than enter a protracted legal process, the state should withdraw."
Graham Bowman, an attorney with the Ohio Poverty Law Center, said "the Ohio Medicaid work requirement will almost certainly be challenged in court on the same grounds as Kentucky's. Both waivers share the same fatal flaw: they fail to further the purpose of the Medicaid program because, according to the applications themselves, they both result in thousands of people losing access to health care."
Because the Kentucky case was brought in the U.S District Court for the District of Columbia, a case challenging the Ohio waiver could be brought in the same court, he said.
"If that happens, the court's previous decision in the Kentucky case would drive a similar ruling on Ohio's waiver as well," Bowman said.
But Hederman doesn't think the Kentucky ruling precludes CMS from approving Ohio's waiver.
Kentucky's waiver, he said, was more of comprehensive Medicaid reform package, including cost-sharing elements and ending retroactive eligibility in addition to the work requirement.
"It was a much broader waiver that affected far more people than Ohio's did," Hederman said.
In its proposal, the state's Medicaid office said it wanted to "operationalize the work and community engagement requirement in a pragmatic way that supports the underlying goals of promoting economic stability and financial independence while improving health outcomes."
Amanda Woodrum, senior researcher for Policy Matters Ohio, a left-leaning think tank, said the Kentucky decision challenges the conservative argument that requiring people to meet a work requirement will improve health outcomes.
"Their efforts were to undercut Medicaid expansion by adding new hurdles to care. In order to do that, they really had to twist themselves into a pretzel logically. I think what the court did here was say, 'That doesn't work,'" Woodrum said. "I definitely think this will slow them down. They were already twisted into a pretzel. Now they're going to have to contort themselves even further. That's probably going to take a minute."
Hederman, however, sees the decision as one "focused more on the process than the policy."
"What I think the judge is telling the secretary is: "Go back and do a better job doing your homework," Hederman said. "It's not a ruling on the demerits of the program."