Medicaid Work Requirements at the U.S. Supreme Court

(This post was updated on February 19, 2021, to reflect recent CMS actions)

The Biden Administration has started the process to withdraw Medicaid work requirement waivers approved by the Trump Administration, as the March 29th Supreme Court oral argument date approaches. Before leaving office, the Trump Administration asked the Court to decide whether Medicaid work requirements are legal. A decision is expected by the end of the term in June – unless the Court agrees that the Biden Administration’s reversal makes the cases moot. The Supreme Court decided to hear the cases after the DC appeals court, in a unanimous opinion written by a judge appointed by President Reagan, affirmed that the HHS Secretary’s approval of Medicaid work requirements in Arkansas was unlawful because the Secretary failed to consider the impact on coverage. The DC appeals court subsequently ruled that its decision in the Arkansas case applied to a New Hampshire case challenging Medicaid work requirements and affirmed that the Secretary’s New Hampshire approval also was unlawful. In addition to work requirements, both cases challenge waivers of Medicaid’s 3-month retroactive coverage requirement. The Trump Administration also approved work requirement waivers in other states, but none is currently in effect, either due to litigation or the pandemic.

What Actions Has the Biden Administration Taken?

A January 28^th executive order from President Biden to “protect and strengthen Medicaid” set the stage for the Biden Administration’s recent actions. The executive order directed HHS to consider whether to suspend, revise, or rescind any policies or waivers that “may reduce coverage under or otherwise undermine Medicaid” as well as policies or practices that “may present unnecessary barriers” to people attempting to access Medicaid. On February 12^th, the Biden Administration sent letters notifying Arkansas, New Hampshire, and other states with approved work requirement waivers that CMS has “preliminarily determined” that work requirements do not further Medicaid program objectives. States have 30 days to provide additional information to CMS that they believe “may warrant not withdrawing” the work requirement authorities. The Biden Administration also removed from Medicaid.gov the Trump Administration guidance that invited states to apply for work requirement waivers.

In its letter to Arkansas, CMS cited data showing that over 18,000 people lost coverage while work reporting requirements were in place there. CMS noted that states cannot terminate coverage for failing to meet a work requirement while receiving the enhanced federal matching funds provided by the Families First Coronavirus Response Act in response to the public health emergency. CMS also said that the COVID-19 pandemic’s impact on enrollee health and the economy creates “serious concerns about testing policies that create a risk of a substantial loss of health care coverage in the near term.” Across states, other data show that most Medicaid adults were working prior to the coronavirus pandemic, albeit primarily in low-wage jobs in industries likely affected by the recent economic downturn. Among those not working, many face barriers such as caregiving responsibilities, illness or disability, and school attendance. Data in Arkansas revealed that issues related to disability and technology were major barriers for eligible people to maintain coverage and navigate work reporting and exemption rules.

What Happens Next in the Supreme Court?

The opening brief setting out HHS’s position in the Supreme Court cases was filed by the Trump Administration on January 19^th, the day before President Biden’s Inauguration. Arkansas and New Hampshire joined the Trump Administration in urging the Supreme Court to reverse the appeals court decisions. Seventeen states, led by Indiana, filed an amicus brief in support of work requirements, and Nebraska filed a separate amicus brief making a similar argument. The answering brief setting out the arguments of the Medicaid enrollees who challenged the Arkansas and New Hampshire approvals has been filed, and amicus briefs in support of the enrollees’ position are due on February 25^th. HHS’s reply brief is due shortly before the March 29^th argument date. Court observers and policymakers will be closely watching the Biden Administration’s subsequent actions now that the process to withdraw work requirement waivers has begun.