Lawsuit filed on work rule for Medicaid

Federal officials’ authority to OK state waiver at issue

Less than two months after winning a federal judge’s order that blocked a work requirement for Kentucky’s Medicaid program, advocacy groups filed a lawsuit on Tuesday challenging Arkansas’ similar requirement.

Echoing arguments from the Kentucky case, the latest lawsuit contends that President Donald Trump’s administration exceeded its authority when it approved the requirement for enrollees in Arkansas’ expanded Medicaid program, known as Arkansas Works.

The suit also takes issue with a requirement that Arkansas enrollees use a state website to report their work activities or exemption status. The lawsuit notes that the 2010 Patient Protection and Affordable Care Act requires states to allow enrollees to submit eligibility forms online, in person, by mail or by telephone.

The lawsuit was filed in federal court in Washington, D.C., on behalf of three Arkansas Works enrollees by the National Health Law Program and the Southern Poverty Law Center, both of which also represented the plaintiffs in the Kentucky case, and by Jonesboro-based Legal Aid of Arkansas.

“We know that being healthy is kind of a requirement to be able to work, and we know that these work requirements and online-only reporting system are likely

to lead to massive terminations [of coverage] for tens of thousands of people, many of whom are our clients,” Legal Aid of Arkansas attorney Kevin De Liban said.

In a statement, Gov. Asa Hutchinson said the lawsuit “has one goal, which is to undermine our efforts to bring Arkansans back into the workforce, increase worker training, and to offer improved economic prospects for those who desire to be less dependent on the government.”

Named as defendants in the suit are U.S. Secretary of Health and Human Services Alex Azar and his department and Centers for Medicare and Medicaid Services Administrator Seema Verma and her agency.

Health and Human Services Department spokesman Caitlin Oakley said in an email that the agency doesn’t comment on pending litigation.

In March, Arkansas became the third state to receive federal approval to implement a Medicaid work requirement, and in June it became the first state to implement one.

Out of almost 44,000 enrollees who were subject to the requirement last month, 12,722 failed to comply, according to a state Department of Human Services report released Tuesday.

That included 5,426 enrollees who also did not comply with the requirement in June. If they fail to meet the requirement this month, they will lose their coverage starting in September.

Those who were in compliance in July included 30,228 people who were determined to be exempt based on information in state records or because they had reported exemptions in June. Such exemptions apply, for instance, to enrollees living with dependent children or who earn at least $736 a month. That cutoff is based on the average monthly income of someone making the state’s minimum wage of $8.50 an hour and working 20 hours a week.

Just 2,415 people met the requirement by using the state website to report their work activity or exemptions. Of those, 1,571 reported exemptions and 844 reported engaging in 20 hours of work or other approved activities, such as taking classes or volunteering.

When fully implemented, the requirement will apply to about 167,000 enrollees. It is being phased in for enrollees ages 30-49 this year and for those ages 19-29 next year. Older enrollees are exempt, and people under age 19 are not eligible for Arkansas Works.

As of Aug. 1, 265,223 people were enrolled in the program, which covers people with incomes of up to 138 percent of the poverty level who became eligible for Medicaid under the expansion in 2014.

The income cutoff this year is $16,753 for an individual or $34,638 for a family of four. Most enrollees receive the coverage through private insurance plans, with the Medicaid program paying the premiums.

Hutchinson spokesman J.R. Davis said some of those who have failed to report may have gained coverage from another source — such as under a spouse’s plan or through a new job — and no longer need the Arkansas Works coverage.

As for the others, the state has used letters, emails and phone calls to make sure they know about the requirement, he said.

“If someone makes the decision, ‘Hey look, I just don’t want to work,’ this should come as no surprise to them,” Davis said.

The lawsuit was filed on behalf of Cesar Ardon, 40, of Siloam Springs, who works in construction and as a self-employed handyman; his wife, Marisol, 44, who hasn’t worked since March 2017 because of health problems; and Charles Gresham, 37, of Harrison, who, according to the suit, would like to work but suffers from a seizure disorder that has made it difficult to keep a job.

Cesar Ardon met the work requirement last month after being out of compliance in June because he didn’t work enough hours, according to the lawsuit. Marisol Ardon, who is separated from her husband, did not meet the requirement in June or July and doesn’t expect to meet it in August, either, the suit says.

Gresham didn’t meet the requirement in June or July because he couldn’t find a job, the lawsuit says. He also can’t meet the requirement through other activities, such as volunteering, because he doesn’t have a car, isn’t comfortable using a computer to report his activities and “may not be able to do an activity as scheduled,” according the suit.

All three plaintiffs have had trouble using the state website, the suit says. Marisol Ardon, who tried to create an account on the site several times, sent the state Human

Services Department a paper about not being able to work because of her back problems, but she hasn’t heard back, the suit says.

The lawsuit contends that Azar acted in an “arbitrary and capricious” manner and abused his discretion in approving a waiver from Medicaid laws that allowed Arkansas to impose the requirement.

It also argues that Verma failed to follow the federal Administrative Procedure Act when she sent a letter to state Medicaid directors in January offering guidance on making requests for such waivers.

The suit contends that the waivers are part of the Trump administration’s effort to undermine the Affordable Care Act in violation of the president’s duty under the Constitution to execute laws passed by Congress.

U.S. District Judge James Boasberg on June 29 rescinded the waiver allowing a work requirement in Kentucky, ruling that Azar failed to consider the effect the requirement would have on enrollees’ health coverage.

In response, the Centers for Medicare and Medicaid Services solicited a new round of public comments on the waiver. According to news reports, federal officials hope to satisfy the judge’s concerns by showing they considered the requirement’s effect on coverage.

Hutchinson said Arkansas is “providing substantial assistance to anyone that has limited access to the Internet or who may encounter additional challenges.”

“Our goal is to assist those in compliance so that their health care coverage continues; however, we must have an accountable system that does not leave thousands of able-bodied recipients on the Medicaid rolls who may not qualify for a whole host of reasons,” he said.

He added that he’s disappointed in the participation in the suit by Legal Aid of Arkansas, which he noted is “in part funded by federal taxpayer dollars.” The group, which provides free legal help to low-income people, has “a consistent history of trying to thwart any effort to transform and bring accountability to our Medicaid program,” he said.

Legal Aid of Arkansas Director Lee Richardson responded that change “has to happen within the bounds of the law.”

“These work requirements are illegal, nearly 13,000 Arkansans are already on the path to losing coverage, and many of them have come to us,” Richardson said in a statement. “We are simply doing our job to help our clients assert their legal rights.”