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CMS Ignores Federal Judge Ruling To Approve Medicaid Work Rules in Utah

Less than 48 hours after a federal judge struck down Medicaid work requirements, the Centers for Medicare & Medicaid Services on Friday gave Utah permission to use those mandates.

CMS Administrator Seema Verma said in her approval letter that requiring Medicaid enrollees to work was allowed because it helps make them healthier.

“Therefore we believe an objective of the Medicaid program, in addition to paying for services, is to advance the health and wellness needs of its beneficiaries, and that it is appropriate for the state to structure its demonstration project in a manner that prioritizes meeting those needs,” she wrote.

Verma’s stance runs directly counter to U.S. District Court Judge James Boasberg, who in twin rulings Wednesday said work requirements in Arkansas and Kentucky are illegal under the 1965 Medicaid law. Boasberg said several times that promoting health was not the objective of Medicaid, despite that opinion from Verma and Health and Human Services Secretary Alex Azar.

In his Kentucky ruling, Boasberg wrote that using health as an objective would be “arbitrary and capricious.”

Promoting health, he added, is “far afield of the basic purpose of Medicaid: ‘reimbursing certain costs of medical treatment for needy persons.’”

Verma noted that Utah is structuring its program somewhat differently than other states.

Sara Rosenbaum, professor of health law and policy at George Washington University in Washington, D.C., said the Trump administration is “doubling down” by allowing a state to add work requirements.

“This is such a remarkable example of sticking a finger in the eye of the court,” Rosenbaum said. “We will see what happens. Because when you disrespect a court, it can backfire.”

CMS’ approval also allows Utah to cap enrollment if the state runs out of money.

Health experts said Utah’s letter clearly shows that the Trump administration plans to appeal Boasberg’s decision.

In addition to Kentucky, Arkansas and Utah, CMA has approved Medicaid work requirements in Arizona, Indiana, Michigan, New Hampshire, Ohio and Wisconsin.

Verma’s approval was for an application that Utah made in 2018. It will partly expand Medicaid to cover all adults under the poverty level ($12,490 for an individual this year). Enrollees will be asked to make some job searches but they will not be required to report a certain number of hours of work.

In November, Utah voters approved a ballot measure calling for the expansion to 138 percent of the federal poverty level (about $17,200) as allowed under the Affordable Care Act.

State officials expect about 90,000 people to gain coverage under the expansion approved Friday. About 150,000 people would have been covered under the plan approved by voters.

The plan approved Friday will require Utah to pay a bigger portion of the costs for the new enrollees because they will enter Medicaid under the traditional program and the state will get a 70 percent contribution from the federal government to cover their care. If the state had expanded to 138 percent of poverty, the federal government would have paid 90 percent of the costs.

November’s vote raised concerns among state officials, who have opposed Medicaid expansion for years. They have opted instead to prepare another request to CMS that seeks the full 90 percent funding for the new enrollees. But to secure that, Utah is offering to accept unprecedented annual limits on federal and state spending.

Allison Hoffman, a law professor at the University of Pennsylvania, said getting a federal judge to accept the premise that Medicaid is improving health is vital to getting work requirements through the courts. Federal officials “need a judge to buy that,” Hoffman said. “They are going to fish for a different jurisdiction to push this opinion.”

What’s most compelling about the Utah approval, Hoffman said, is how the state legislature ignored the will of voters who approved the referendum. “The legislature is blocking what people voted for … and it appears to be an anti-democratic move.”

This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.