The NCSL Blog

08

By Lisa Soronen

In Azar v. Gresham and Arkansas v. Gresham the U.S. Supreme Court will decide whether it was lawful for the U.S. Secretary of Health and Human Services to allow Arkansas to require certain Medicaid recipients to work or look for work.

Supreme CourtBefore the Affordable Care Act’s Medicaid expansion, Medicaid generally covered people with disabilities, the elderly, adults with dependent children depending on income requirements, children younger than19 and pregnant women. 

 In states that expanded Medicaid, low income adults now qualify as well.

While Medicaid establishes the minimum coverage states must include in their plans, states may request waivers. The Secretary of Health and Human Services approved Arkansas Works which requires beneficiaries aged 19 to 49, with some exceptions, to “work or engage in specified educational, job training, or job search activities for at least 80 hours per month and to document such activities.” Nine Arkansas residents sued claiming the waiver was unlawful.

The D.C. Circuit held that the secretary’s approval of Arkansas’ waiver was arbitrary and capricious in violation of the Administrative Procedures Act. According to the D.C. Circuit, the secretary failed to consider an “important aspect of the problem,” that “coverage is a principal objective of Medicaid” and Arkansas Works would cause coverage loss.

The D.C. Circuit began its analysis by noting that “[t]he statute and the case law demonstrate that the primary objective of Medicaid is to provide access to medical care.

Instead of analyzing whether Arkansas Works would “promote the objective of providing coverage,” the secretary identified three alternative objectives when approving the waiver: “whether [it] was likely to assist in improving health outcomes; whether it would address behavioral and social factors that influence health outcomes; and whether it would incentivize beneficiaries to engage in their own health care and achieve better health outcomes.” But the Medicaid statute’s text doesn’t support any of these objectives.

The court said it was arbitrary and capricious for the secretary to fail to account for the loss of coverage, which commenters brought to the secretary’s attention: “In Arkansas, more than 18,000 people (about 25% of those subject to the work requirement) lost coverage as a result of the project in just five months.”  “Nodding to concerns raised by commenters only to dismiss them in a conclusory manner is not a hallmark of reasoned decisionmaking.

The United States’ brief asking the court to take this case notes that the secretary has approved New Hampshire’s experimentation with work requirements as well.

It is possible that President-elect Joe Biden’s new Secretary of Health and Human Services will rescind Arkansas’ waiver thus mooting this case before the Supreme Court may decide it.

Lisa Soronen is executive director of the State and Local Legal Center and a regular contributor to the NCSL Blog on judicial issues.

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This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.