Planned Medicaid Work Rules’ Impact at Heart of Georgia Lawsuit

MM Curator summary

[MM Curator Summary]: The GA case is different because it only would have added members, not taken away coverage for existing members.


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The Centers for Medicare and Medicaid Services office stands in Woodlawn, Maryland.

Photographer: Jay Mallin/Bloomberg via Getty Images

Georgia’s lawsuit in defense of its Medicaid work requirements could turn on whether a court concludes the state’s proposal will increase or reduce the number of people in the program.

At issue is the Medicaid agency’s rescission under President Joe Biden of the Trump-era waiver that allowed Georgia to partially expand eligibility to include working age adults earning up to 100% of the federal poverty level, set at $27,750 for a family of four in 2022. Beneficiaries would have to complete 80 hours per month of work, education, volunteer work, or other qualifying activities. Adults earning above 50% of the poverty level would have to pay premiums.

Georgia says its plan would add about 60,000 people to the state’s Medicaid rolls. That prediction “might sound OK,” said Sara Rosenbaum, professor of health law and policy at the George Washington School of Law. “But that’s only when you ignore the fact that hundreds of thousands more would get coverage if the state were to fully expand Medicaid.”

The lawsuit filed in U.S. District Court for the Southern District of Georgia will concern fairly typical administrative law issues: whether the Centers for Medicare & Medicaid Services had the authority to withdraw approval for Georgia’s plan, and whether the agency had good reasons for its decision—or whether its action was “arbitrary and capricious.”

But inside the administrative-law wrapping is a policy question that hasn’t been tested: whether work requirements in Medicaid are acceptable as part of a proposal to bring new people into the program, even if more people would gain coverage if the work requirements were removed.

“The thing about Georgia is that it’s not like other states that tried to impose work requirements after having expanded Medicaid to adults,” said Sidney Watson, director of the Center for Health Law Studies at the Saint Louis University School of Law and a critic of work requirements. “In those states, the work requirements ended up taking coverage away from people who already had it. But Georgia is saying, that’s not what’s happening here, no one will lose coverage from this plan.”

A CMS letter formally withdrawing approval for the Georgia plan came Dec. 23. The state filed its lawsuit over that decision Jan. 21. A response to the lawsuit from the Department of Justice is expected shortly.

Limited Expansion

States are allowed under the Affordable Care Act to expand Medicaid eligibility to include adults earning up to 138% of the federal poverty level. Georgia is one of 12 states that hasn’t expanded.

Around 500,000 working-age Georgia residents would be eligible for Medicaid if the state fully expanded the program, according to the Georgetown University Health Policy Institute.

“This Georgia proposal, if it weren’t so tragic, it would be laughable,” Rosenbaum said. “Here we are, in the middle of a global pandemic in which having as many people covered as possible is a public health imperative, here we have a state that wants to impose work requirements on the people who have been hardest hit by the pandemic, and have been the most dislocated.”

Bait and Switch

The CMS’s goal in withdrawing approval for work requirements and premiums, but not for the entire Georgia proposal, was to leave the option of a broader Medicaid expansion on the table, Watson said.

The work requirement and premium provisions “would not promote the objectives of the Medicaid program,” especially in light of the impact of the Covid-19 pandemic, the agency said.

“It’s interesting that the CMS didn’t withdraw the entire demonstration project,” Watson said. “The withdrawal is limited to the work requirement provisions, which allows the rest of the project to go forward.”

That, in turn, would provide coverage for far more people.

But letting the CMS’s partial withdrawal stand would let the agency get away with an “egregious regulatory bait and switch on the core terms of a massive federal-state program,” Georgia said in the lawsuit. Medicaid is a joint federal-state health insurance program for low-income people.

The plan was “carefully negotiated” with federal regulators, and the work requirement provisions can’t be separated from the expansion provisions, the lawsuit said.

“Georgia agreed to expand Medicaid eligibility only if expansion was conditioned on the community engagement and premium requirements,” the lawsuit said. “By selectively withdrawing those parts of the demonstration, CMS is effectively seeking to convert this [plan] into a full expansion of Medicaid coverage in Georgia—which in no way resembles the program that the State agreed to in its exhaustive negotiations with CMS.”

Georgia argues that its plan will lead to an increase in coverage notwithstanding the impact of work requirements, and therefore does promote the objectives of the Medicaid program, said Thomas Barker, co-chair of the health practice at Foley Hoag LLP in Washington, and a former Department of Health and Human Services general counsel.

“Georgia is saying, ‘Here we are making coverage available to low-income people, they just have to jump through an extra hoop,'” Barker said. “Coverage isn’t currently available to these people, and the combined waiver will make it available to them when they wouldn’t have it otherwise. That’s going to be Georgia’s argument.”

Work Requirements

Work requirements for adults in Medicaid were a policy priority under the Trump administration, which approved them for 12 states, including Georgia. Seven other states submitted requests for work requirements, according to the Commonwealth Fund.

Supporters say the must-work requirements encourage self-sufficiency and provide a path to independence for working-age Medicaid recipients. Critics say they reduce health-care coverage for the working poor, impose unmanageable paperwork burdens on beneficiaries, and are ill-suited for the Covid-19 pandemic.

The CMS began rolling back work requirements in the states that had received approval for them shortly after Biden took office, and Georgia paused its plans to implement its proposal in June.

The case is Georgia v. Brooks-LaSure, S.D. Ga., No. 2:21-tc-05000, filed 1/21/22.


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