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A legal dispute in Kentucky and Arkansas could affect the people of Michigan, but it may not be resolved for years. In March, U.S. District Judge James Boasberg ruled against those two states in a case involving work requirements and Medicaid, a federal-state medical welfare program. The two had imposed work and community engagement requirements on some people who are newly eligible for Medicaid, after first getting permission from the federal government. The Centers for Medicare and Medicaid, also known as CMS, approved the waiver requests the states had filed, but the judge said the requirements run contrary to Medicaid’s purpose. This is the second time the judge ruled against Kentucky, and he told CMS to revisit the waiver it granted and review his position on the law. After his latest ruling, both states, supported by CMS, filed petitions with the highest federal circuit court in the land, asking it to place the case on its docket for the 2019-20 court year.
The ruling has implications for at least five other states, including Michigan, which are moving forward with Medicaid work and community engagement requirements of their own. Gov. Gretchen Whitmer, who is on record as being skeptical of the new requirements, may use the dispute as a reason to slow-walk their implementation. Officials in other states may do the same.
CMS cites this potential limbo for states that have received federal permission for similar changes as one of many important reasons to resolve the legal dispute quickly. In papers it filed with the U.S. Court of Appeals for the District of Columbia, the agency argued that uncertainty over work requirements in Kentucky and Arkansas could disrupt plans elsewhere. It takes a long time to plan and carry out requirements, the agency said, so the court should expedite its process for hearing an appeal. That’s not something the court usually does. Should it acquiesce in this circumstance, that would speed up the case on its way to the Supreme Court, where it will likely be heard. With Michigan’s work requirements set to go into effect in January, the Great Lake State has much at stake in this legal battle.
The most important point of contention is the purpose of Medicaid. In one view — suggested by Judge Boasberg — the program’s aim is to give medical assistance to those who can’t afford it. Under the judge’s reasoning, if thousands of people leave Medicaid because of work requirements, the state has failed them and violated the intent of the program — even if they find private insurance coverage through employment, thus satisfying the work requirement.
Many states, including Michigan, have expanded their Medicaid programs. Usually, however, the cost of doing so has greatly exceeded initial projections due to an unanticipated surge of new enrollees, calling its sustainability into question.
When Michigan expanded its program in April 2014, the state projected about 480,000 new people in Medicaid. Five years later, the number is closer to 700,000. Other states have had a similar experience, and Michigan lawmakers, like those elsewhere, looked for relief. The Mackinac Center and other concerned groups educated lawmakers about the value of obtaining a waiver from the federal government, which would let them apply some restrictions to the new enrollees — comprised primarily of able-bodied adults without dependent children. In 2018, Gov. Rick Snyder signed the relevant legislation into law and CMS then granted the waiver request.
In contrast to Judge Boasberg’s view of Medicaid, those of us who favor market-based solutions to our health care needs give it a more focused role. Medicaid should not seek to enroll as many people as possible. Instead, it should be a temporary bridge to self-sufficiency for those who need help in paying for necessary medical costs and a safety net to the weakest and most vulnerable. Medicaid was not intended to provide the able-bodied adult population with insurance coverage indefinitely.
Under the Trump administration, CMS has also taken this view. It has said, “There is little intrinsic value in paying for [Medicaid benefits] if [they] are not advancing the health and wellness of the individual receiving them, or otherwise helping the individual attain independence.” Work and community engagement requirements (“demonstration projects” in the official language), it said, “also provide an opportunity for states to test policies that ensure the fiscal sustainability of the Medicaid program.”
The Mackinac Center applauds CMS and its commitment to fight on behalf of states, such as Michigan, Kentucky and Arkansas, that are trying to constrain the size and scope of their government health care programs. And we will work with the Whitmer administration and lawmakers to develop work and community engagement requirements that will pass legal muster.
