Work Requirements in Arkansas and Kentucky Blocked by Federal Court

On March 27, 2019, a federal judge for the U.S. District Court for the District of Columbia issued decisions that are vitally important for Medicaid beneficiaries. The two cases, Gresham v. Azar and Stewart v. Azar, halted efforts in Arkansas and Kentucky to condition receipt of Medicaid benefits on securing work or volunteer activities, as well as other cuts to coverage. The court’s rulings reinforced an earlier decision against Kentucky’s work requirement and extended a similar reasoning to the Arkansas requirement.

In making its ruling, the court reaffirmed its prior holding that the federal government cannot approve changes to state Medicaid programs that are not consistent with the central objective of the Medicaid program—to furnish medical assistance to low-income people and people with disabilities. To provide a better understanding of the court’s decision, background on each state’s work requirement is discussed below:

Arkansas’s Work Requirement

Arkansas began requiring Medicaid beneficiaries to work or participate in volunteer activities in June 2018. Although certain groups are exempt from the requirement, those who are subject to it face harsh consequences for noncompliance or for failure to report compliance. People who have not met the work requirement in Arkansas have been disenrolled from Medicaid for the remainder of the year and are not permitted to reapply until the following year. Since the work requirement took effect, more than 18,000 Arkansans have lost Medicaid coverage, and along with it, access to critical health care and needed long-term services and supports.

Kentucky’s Work Requirement

The federal government approved Kentucky’s first request to impose a work requirement in Medicaid on January 12, 2018. The requirement was challenged in federal court and struck down in June of 2018 because the court determined that the federal government did not consider whether the state’s work requirement would help the state to furnish medical assistance as required by the Medicaid statute. The ruling effectively blocked Kentucky from implementing its work requirement. Within months of the court’s decision, the state once again sought and gained federal approval to advance a work requirement and other cuts to coverage. In seeking permission to require Medicaid beneficiaries to work, the state estimated that 95,000 would lose coverage if the requirement was implemented. Unlike, Arkansas, the state was not allowed to implement changes to its Medicaid program because of the June 2018 ruling, sparing beneficiaries from losing needed coverage.

What’s Next for Work Requirements?

For now, Arkansas and Kentucky will not be allowed to move forward with their work requirements. It is unclear what this means for people who have already lost coverage in Arkansas. Kentuckians fare better because the state’s waiver was never implemented.

The ruling is certain to be appealed. In the meantime, six more states have federal approvals to move forward with work requirements and ten states are waiting for approvals. It remains to be seen whether the federal government will come up with a new rationale on which to base continued approval of work requirements and other cuts to coverage.

While today’s news is encouraging, we will continue to monitor states that have approvals to impose work requirements. If those states press on to implementation, it will be critical to monitor how the requirements impact beneficiaries in terms of coverage losses and the negative health outcomes that result from such losses.

Michael JN Bowles

Lynda Flowers is a senior strategic policy advisor at the AARP Public Policy Institute.

Jean Accius is Vice President for the Long-Term Services and Supports & Livable Communities Group at the AARP Public Policy Institute.

Kelly Bagby is Vice President for Litigation on Health, Housing, and Human Services, AARP Foundation.