Arkansas Works ‘work requirement’ struck down by federal judge (Updated)

Editor’s note: Updated with changes and additions throughout.

A U.S. district judge struck down the Arkansas Works work requirement Wednesday, March 27, ruling that the secretary of Health and Human Services’ decision granting it was “arbitrary and capricious.”

In Charles Gresham, et al. v. Alex M. Azar II, et al., Federal Judge James Boasberg said HHS Secretary Azar’s decision to grant Arkansas the work requirement waiver was “arbitrary and capricious because it did not address – despite receiving substantial comments on the matter – whether and how the project would implicate the ‘core’ objective of Medicaid: the provision of medical coverage to the needy.”

He ruled in the Arkansas case and in a separate Kentucky case that the work requirement could not stand. He relied on an earlier ruling against Kentucky’s work requirement he had made in June 2018.

The plaintiffs are represented by Legal Aid of Arkansas, the National Health Law Program, and the Southern Poverty Law Center.

Legal Aid Attorney Kevin De Liban said of the ruling, “This means the work requirements and the whole Arkansas Works approval is gone. So there are no work requirements right now.”

He later added, “The judge has said the work requirements are illegal. The experience on the ground has shown that they’re wildly harmful. So we see no reason given that they’re both illegal and harmful why it would be in the state or federal government’s interest to pursue it further.”

The ruling came the same day that the Arkansas Senate approved funding for the Department of Human Services Division of Medicaid Services, the agency that administers Medicaid. All state appropriations require a 75% vote. Opponents in the past have tried to block Arkansas Works by denying funding to the division.

Now the bill goes to the House. In a statement from the House press office, Speaker Matthew Shepherd said, “I will be reviewing the opinion and talking with the Governor’s office, DHS, and House and Senate leadership to determine if any changes should be considered in how the House proceeds.”

Gov. Asa Hutchinson said he would call a news conference at 11 a.m. Thursday to discuss the ruling. His office issued a statement saying, “I am disappointed in the decision handed down late this afternoon. I have not yet had the opportunity to review the opinion in its entirety, but I plan to do so this evening and provide further comment tomorrow morning on the future of the Arkansas Works work requirement.”

Boasberg referenced three of the nine Arkansas plaintiffs involved in the case. One was Adrian McGonigal, a Pea Ridge resident who lost his insurance after mistakenly believing he had complied with the work requirement and then lost his job after suffering from health conditions because he could not afford his medication. Anna Book of Little Rock does not have a reliable internet connection. Russell Cook of Little Rock is a homeless man who does not have access to the internet or a phone.

Boasberg rejected claims by the state that striking down the provision would be disruptive.

“Weighing the harms these persons will suffer from leaving in place a legally deficient order against the disruptions to the State’s data-collection and education efforts due to vacatur renders a clear answer: the Arkansas Works Amendments cannot stand,” Boasberg ruled.

He noted that in the months he referenced, only 12.3% of persons not exempt from the requirements reported any kind of qualifying activity. He also noted that “the State’s outreach efforts may well be falling severely short” with respect to notifying Medicaid enrollees of how to maintain their status.

Originally known as the “private option,” Arkansas Works was created by legislators and Gov. Mike Beebe’s administration in 2013. It was created after the U.S. Supreme Court ruled states could choose whether or not to expand their Medicaid populations under the Affordable Care Act, otherwise known as Obamacare.

Many Republican-leaning states chose not to expand their populations. Arkansas did, but instead of simply expanding Medicaid, it used mostly federal funds to purchase private health insurance for those lower-income individuals. A total of 235,962 individuals were enrolled March 1.

After Gov. Hutchinson was elected, he embraced the program, helping it each year attain the 75% support required in both the Arkansas House and Senate for funding. To help secure that support among skeptical lawmakers, the state requested and was granted a federal waiver allowing it to require non-exempt recipients to work 80 hours per month or engage in other community engagement activities.

In 2018, 18,164 enrollees lost coverage for failing to meet the requirement. Of those, 1,452 of those recipients gained coverage in 2019, including 1,441 of them in Arkansas Works. More than 13,000 recipients of the state’s Arkansas Works program did not meet its work requirement in February.

Dr. Joe Thompson, director of the Arkansas Center for Health Improvement, said the judge “put a pretty hard lock on the door.”

“This is a pretty solid rebuke,” he said. “Now, obviously Kentucky and Arkansas and (the Trump administration) can appeal this judge’s rulings, and I would imagine will. But I think it puts a halt on the current Arkansas Works work and community engagement requirement as it’s currently deployed.”

U.S. Rep. Steve Womack issued a statement saying, “Today’s decision is another example of an activist, liberal judge trying to legislate from the bench. States have the right and authority to implement Medicaid programs and rules as they see fit. Work and community engagement requirements allow our most vulnerable to receive a hand up by equipping them with both the assistance and the tools needed to earn a job. This is about creating a system that not only helps those when they hit tough times, but also encourages them to get back on their feet. I hope this misguided decision will be overturned.”