By Sheldon Weisgrau | Feb. 24, 2020

In a key ruling that could impact the expansion of KanCare, the Kansas Medicaid program, a federal appeals court has upheld a lower court’s ruling striking down work requirements for Medicaid beneficiaries. The unanimous decision by a panel of judges – written by a justice appointed by President Reagan – found that the federal government had been “arbitrary and capricious” in allowing the state of Arkansas to require Medicaid beneficiaries to document work as a condition of eligibility. Although the ruling affects only Arkansas, it should be a signal to Kansas legislators that the courts are not likely to view work requirements favorably.

The Trump Administration’s Department of Health and Human Services (HHS) has urged states to impose work requirements as a condition of Medicaid eligibility. Ten states have received permission to do so, although only Arkansas had fully implemented the provision. In the six months the requirements were in place before being halted by a federal district court, 18,000 Arkansans lost their Medicaid coverage. This is where the Arkansas work requirement – and presumably those proposed by other states – went wrong, according to the Court of Appeals.

Federal law says that a state may operate a demonstration project – like imposing work requirements on Medicaid beneficiaries – if that project promotes the objectives of the Medicaid program. What is the principle objective of Medicaid? The appeals court found that it is “indisputably” providing health care coverage. Not, as claimed by Arkansas and HHS, to help beneficiaries achieve financial independence. Not to transition them to commercial coverage. Not to find a job. If Congress was interested in those objectives, the court reasoned, it would have said so. Nowhere in the Medicaid statute is a purpose other than health care coverage mentioned.

And that makes sense. Because Medicaid itself supports work. A basic premise for providing public health insurance is that keeping people healthy ensures they will be able to participate in the workforce. The majority of people eligible for Medicaid expansion already work. Of those that don’t, the most common reason is that they’re not healthy enough to work. They need health care coverage, which Medicaid provides, to access the medical and other services necessary to improve their health enough that they can work. By conditioning health coverage on work, work requirements get the relationship between work and health exactly backwards.

We may not have heard the end of the legal saga for work requirements. It’s possible the Trump administration will appeal this decision to the Supreme Court, although it’s unusual for the Supreme Court to accept cases in which there is no dispute among lower courts. Nevertheless, the Appeals Court ruling is an unambiguous declaration that work requirements and similar provisions that would result in large coverage losses are inconsistent with the clear purpose of the Medicaid program, are counterproductive, and are not permissible. Adding work requirements to KanCare expansion would ensnare the state in expensive litigation and serve simply as a delaying tactic and barrier to coverage.

A straightforward expansion of KanCare, without work requirements or other barriers and delays, is the best route for Kansas.

Sheldon Weisgrau is the Alliance for a Healthy Kansas’ Senior Policy Advisor. Contact Sheldon at sheldon@expandkancare.com.