A federal judge on Wednesday blocked Michigan's Medicaid work requirement, which took effect in January and could have resulted in thousands of low-income adults losing coverage as early as June.
U.S. District Judge James Boasberg in Washington vacated HHS' December 2018 approval of Michigan's "community engagement" waiver that required Medicaid expansion enrollees to report 80 hours a month of work or other "community engagement" activities to retain their coverage. He is still considering the legality of new premiums and copays under the waiver.
The ruling, in response to a lawsuit filed last year by advocacy groups and beneficiaries challenging the state's policy, is the latest in a series of legal defeats for the Trump administration's signature Medicaid policy of requiring many beneficiaries work, go to school, or do volunteer work.
Nearly two-thirds of non-disabled adult Medicaid beneficiaries hold full-time or part-time jobs, according to the Kaiser Family Foundation.
Boasberg cited a Feb. 14 decision by the U.S. Court of Appeals for the District of Columbia Circuit throwing out HHS' approval of Arkansas' similar waiver. The appellate panel's unanimous opinion said the waiver approval was not consistent with the primary objective of the Medicaid statute, which is furnishing medical coverage.
The appellate panel said HHS improperly substituted alternative objectives, such as improving health outcomes, and did not properly consider whether Arkansas' waiver would cause people to lose coverage. More than 18,000 Arkansans were dropped from coverage in 2018 because they did not report if they complied with the work requirement rules.
The Trump administration has not announced whether it will appeal the appeals court's ruling to the Supreme Court.
CMS Administrator Seema Verma has aggressively promoted the administration's policy of encouraging Medicaid work requirements. Ten states have won work requirement waiver approvals, while nine more are seeking similar approvals. The president's latest budget calls for implementing Medicaid work requirements nationwide, projecting savings of $152 billion over 10 years.
Boasberg previously blocked work requirements in Arkansas, Kentucky, and New Hampshire. A number of states already have paused their Medicaid work requirements based on the court setbacks.
Michigan's Democratic Gov. Gretchen Whitmer had supported throwing out her state's Republican-sponsored work requirement, called Healthy Michigan. The state planned to send notices next week to more than 80,000 people who did not comply with the reporting requirements, the first step in disenrolling them.
The only Medicaid work requirement still going forward is in Utah, where Medicaid expansion enrollees must report whether they have applied for employment. It does not require them to actually be employed.
The CMS said it's reviewing Boasberg's ruling and determining its next steps.
"CMS remains steadfast in our commitment to considering proposals that would allow states to leverage innovative ideas," the agency said in a written statement.
Gov. Whitmer's office did not respond to a request for comment.
Kelly Bidelman, executive director of the Center for Civil Justice, one of the groups that brought the Michigan legal challenge, was pleased with the decision.
"We're very happy for the thousands of Michigan residents who were very worried they wouldn't be able to meet the work requirement," she said.
