This lawsuit grew out of Kentucky’s attempts to impose Medicaid work requirements. On August 24, 2016, the Governor of Kentucky, Matt Bevin, submitted an application under Section 1115 of the Medicaid Act to the U.S. Department of Health and Human Services (HHS). He requested a waiver of various Medicaid Act requirements to implement the “Kentucky HEALTH” project, which required Medicaid enrollees to work in order to receive health insurance. Kentucky also sought to increase premiums and impose other eligibility restrictions. HHS approved the waiver.

In response, several Kentucky residents enrolled in the Kentucky Medicaid Program filed this lawsuit in the U.S. District Court for the District of Columbia on January 24, 2018. The plaintiffs sued HHS for violating the Administrative Procedure Act (APA) (5 U.S.C. §§ 551 et seq.). The plaintiffs, represented by the National Health Law Program, the Kentucky Equal Justice Center, and the Southern Poverty Law Center, sought declaratory and injunctive relief as well as attorneys’ fees and costs. The plaintiffs claimed the defendant’s waiver constituted an unauthorized attempt to rewrite the Medicaid Act and violated the APA.

On March 29, 2018, Governor Bevin filed an unopposed motion to intervene to defend his Section 1115 waiver. The court granted this intervention and the Commonwealth of Kentucky intervened as a defendant.

On March 30, 2018, the plaintiffs moved for summary judgment, arguing that the defendant lacked the authority to fundamentally restructure Medicaid through the approval of Kentucky HEALTH. The plaintiffs further argued that the defendant’s approval of the Kentucky HEALTH provisions exceeded statutory authority and was arbitrary and capricious.

On April 25, 2018, the defendants filed separate motions for summary judgment. The Commonwealth argued that the plaintiffs lacked standing, that their arguments about the scope of Section 1115 and Medicaid’s objectives were demonstrably wrong, and that HHS's approval of Kentucky HEALTH’s provisions was valid. HHS argued that Section 1115 of the Social Security Act conferred broad discretion to approve state projects and that it complied with all APA standards. HHS further argued that both the plaintiffs’ challenge to the individual components of Kentucky HEALTH and their challenge to HHS’s approval letter were non-justiciable and failed on their merits.

On June 29, 2018, the court (Judge James E. Boasberg) granted plaintiffs’ partial summary judgment motion and denied both defendants’ motions for summary judgment. In so doing, the court held that the plaintiffs had standing, the court had the ability to review the waiver approval, and that HHS’s waiver approval violated the APA. The court reasoned that the defendants’ “signal omission” was that it failed to “adequately consider [] whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens.”

In an attempt to cure the deficiencies that the court had identified, HHS conducted further review and re-approved Kentucky HEALTH. That prompted another plaintiffs’ motion for partial summary judgment, which was filed on January 17, 2019. The defendants responded with separately filed motions for summary judgment on February 4, 2019.

On March 27, the court granted the plaintiffs’ motion for partial summary judgment and denied both defendants’ motions for summary judgment. The court again held that the Commonwealth had failed to adequately consider whether the program would help to provide adequate medical assistance to its citizens.

On April 10, the defendants appealed to D.C. Circuit, which heard oral arguments on October 11, 2019. But Kentucky abandoned the Kentucky HEALTH project on December 16. The D.C. Circuit dismissed the appeal as moot but declined to vacate the district court’s judgment. That allowed the plaintiffs to seek attorney’s fees, although they have not done so as of January 2020. The case remains open to the extent that the plaintiffs can pursue attorney’s fees.

This is one of a number of cases challenging Medicaid work requirements. In Philbrick v. Azar, a New Hampshire case, the court vacated the Trump administration’s approval of New Hampshire’s demand for work or community service from "able-bodied" adults enrolled in its Medicaid Program. In Gresham v. Azar and Rose v. Azar, from Arkansas and Indiana, respectively, courts similarly forbade the states from conditioning Medicaid eligibility on compliance with work requirements.

Jake Parker - 06/08/2018
Bogyung Lim - 02/05/2020


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