Appeals Court Upholds Rejection of Arkansas Medicaid Work Rule

Published March 16, 2020

Arkansas sought the work rule under Section 1115 of the Social Security Act, which authorizes the U.S. Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS) to approve requests from state governments to tailor Medicaid to their respective needs.

CMS approved Arkansas’ waiver in March 2018, following the state’s decision to expand Medicaid in 2014. Three enrollees challenged the rule in the Federal District Court for the District of Columbia in August 2018, and in March 2019, the plaintiffs prevailed. Judge James E. Boasberg blocked not only Arkansas’ work rule, but a similar one in Kentucky.

According to U.S. Court of Appeals Judge David Sentelle, who ruled to uphold the Arkansas work rule decision, HHS Secretary Alex Azar did not properly explain how adding work requirements to Medicaid eligibility rules would promote the entitlement program’s stated purpose, as written in federal law.

“The statute and the case law demonstrate that the primary objective of Medicaid is to provide access to medical care,” Sentelle wrote in the February 14 ruling. “There might be secondary benefits that the government was hoping to incentivize, such as healthier outcomes for beneficiaries or more engagement in their health care, but the ‘means [Congress] has deemed appropriate’ is providing health care coverage. In sum, ‘the intent of Congress is clear” that Medicaid’s objective is to provide health care coverage, and, as a result, the Secretary “must give effect to [that] unambiguously expressed intent of Congress.'”

Setback to Ending the Poverty Trap

The status quo of not requiring able-bodied enrollees to work can trap people into a cycle of joblessness and dependency, says Rea Hederman, Jr., executive director of the Economic Research Center at The Buckeye Institute (see related article, page 21).

 “Under Medicaid expansion, healthy, single adults have left the workforce or reduced their work hours to become or remain eligible for Medicaid,” Hederman stated in a news release.

Hederman states The Buckeye Institute’s research confirms Medicaid robs enrollees of a chance at building wealth.

“[Our report], ‘Healthy and Working: Benefits of Work Requirements for Medicaid Recipients,‘ reveals that these decisions risk reducing workers’ lifetime earnings by close to $1 million for people who transition off of Medicaid, by more than $212,000 for women who remain on Medicaid for their entire working life, and by more than $323,000 for men who remain on Medicaid,” Hederman wrote.

To the contrary, a work requirement is compassionate, Hederman writes.

“Work and community engagement requirements can lead to better job opportunities with better quality private insurance, higher earnings, and can increase economic prosperity,” Hederman wrote.

Arizona, Ohio, South Carolina, and Wisconsin have been granted permission to include work requirements in their Medicaid programs, but have not yet done so. CMS is considering similar waiver requests from Georgia, Idaho, Mississippi, Montana, Oklahoma, South Dakota, Tennessee, and Virginia.


Jesse Hathaway ([email protected]) is a policy advisor with The Heartland Institute.