Two legal advocacy groups sued on Friday to block Indiana's Medicaid work requirement waiver, less than three weeks before a federal appeals court will hear arguments on whether such programs are lawful.
Indiana Legal Services and the National Health Law Program sued HHS and the CMS in U.S. District Court in Washington, D.C., to invalidate a Section 1115 waiver Indiana received early last year to establish the work requirement program. They filed the suit on behalf of four Medicaid expansion enrollees they claim could lose coverage under the work rules.
Like three previous lawsuits challenging state work requirement waivers, the new suit claims the waiver is inconsistent with the Medicaid statute's objective of "furnishing coverage," and that HHS and the CMS violated the Administrative Procedure Act and the U.S. Constitution in approving it.
Indiana estimated that 24,000 people would lose Medicaid coverage once the work requirement was fully implemented, though the state's secretary of health more recently promised that not a single person would lose coverage under the "Gateway to Work" program.
"These requirements put an extra burden on Medicaid eligibility that jeopardizes the health coverage of our clients and thousands of other vulnerable individuals," said Adam Mueller, director of advocacy at Indiana Legal Services.
The lawsuit also seeks to remove Indiana waiver provisions requiring enrollees to pay premiums, establishing lock-out penalties, eliminating retroactive coverage, and ending coverage for non-emergency medical transportation.
Earlier this year, U.S. District Judge James Boasberg invalidated work requirement waivers in Arkansas, Kentucky and New Hampshire. He likely will be assigned to the Indiana case as well. The Trump administration is challenging his rulings before the U.S. Court of Appeals for the District of Columbia Circuit, which is scheduled to hear oral arguments on Oct. 11.
The Indiana waiver program requires low-income adults enrolled in the state's Medicaid expansion program to eventually work at least 80 hours per month or participate in other "community engagement" activities like job training or education to continue to receive benefits.
Enrollees had to start reporting compliance in July, and people will start losing coverage at the end of 2019 if they fail to meet the work requirements five or more months out of the year. Unlike in some other states, they will be able to immediately re-enter the program once they comply.
Exemptions are available for pregnant women, disabled people and other groups.
The CMS has approved Medicaid work requirement waivers in nine states, while eight more states have waivers pending.
With the encouragement of Trump administration officials, Republican governors and legislators have pushed for Medicaid work requirements based on the argument that working improves beneficiaries' health and welfare. It's also seen as a way to expand Medicaid in a way that placates conservatives opposed to Medicaid expansion under the Affordable Care Act.
But critics say work requirements are a thinly veiled method to reduce coverage by imposing onerous reporting and administrative burdens on enrollees that many will not be able to meet. They point to the experience in Arkansas, where nearly 18,000 expansion enrollees lost coverage last year after a work requirement was implemented.
Supporters of Indiana's waiver argue, however, that the state has taken a smarter and gentler approach by phasing the work requirement in over a longer period, using a less punitive test for compliance, and letting people re-enroll as soon as they come into compliance.
