Bevin’s Medicaid plan ‘dressed as a wolf,’ critics tell judge in case with national impact

The federal judge who has already once struck down Gov. Matt Bevin’s controversial Medicaid overhaul cast a seemingly skeptical eye Thursday as Kentucky and Trump administration officials sought to defend requiring some recipients to find jobs, volunteer or lose their benefits.

U.S. District Court Judge James E. Boasberg quizzed lawyers as to why he shouldn’t again strike down the initiative and whether it meets Medicaid’s objective to provide medical care.

The program — which Boasberg struck down last June — is scheduled to go into effect April 1, but a group of Kentucky Medicaid recipients is hoping to convince the judge to again side with them and block its start, arguing that thousands will be left without health coverage. He also heard a challenge to work requirements imposed by Arkansas that have led to an estimated 17,000 losing coverage.

Lawyers with the governor’s office and the Trump administration argued that any flaws he identified were addressed and the state is ready to roll out Bevin’s Kentucky HEALTH initiative.

Kentucky and U.S. Health and Human Services Secretary Alex Azar have “worked exhaustively to minimize coverage loss,” argued Matthew Kuhn, Bevin’s deputy general counsel, who sported a bright red pin scissors pin, a symbol of Bevin’s signature Red Tape Reduction Initiative, as he argued his case in federal court. He said the changes would exempt thousands from the work requirements.

But Ian Gershengorn, an attorney for the National Health Law Program, which argued the case for the plaintiffs, dismissed the changes and said they’d still result in an unacceptable loss of coverage.

“This wolf comes dressed as a wolf,” said Gershengorn, who accused the Trump administration of approving “cookie cutter” plans in an effort to remake the Medicaid system.

In an exchange that drew laughter in the courtroom, when U.S. Justice Department attorney James Burnham said that Kentucky wouldn’t know how many people would lose coverage until they started the program, Boasberg pointed to the loss of coverage in Arkansas.

In his ruling last June striking the Kentucky plan, Boasberg ruled that Azar “never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid.”

Kentucky was the first of four states to win federal approval to impose a work requirement for Medicaid enrollees and the case has national implications with other states moving quickly to impose similar restrictions. Utah in February passed changes to a voter-approved Medicaid expansion last month, cutting the number of people covered nearly in half and adding work requirements.

The hearing came as Arkansas — the only state to have actually enacted the changes — fends off similar efforts to block its plan, which has resulted in 17,000 people losing coverage.

There is massive harm,” Gershengorn said of the effects of imposing work requirements and imposing premiums. “It is not speculative.”

Lawyers for the government argued that if Boasberg, an appointee of former president Barack Obama, strikes down the provisions it could have a chilling effect on the 14 states that have not expanded Medicaid to include able-bodied adults. They argued that states will want the flexibility to experiment with ways to save money.

Kentucky officials have argued that the expansion is unsustainable without changes. At the Conservative Political Action Conference last month several miles from the courthouse, Bevin defended his initiative, saying it’s the only way that Kentucky can afford to provide Medicaid. He noted that after Kentucky expanded Medicaid more able-bodied Kentuckians are now “getting free health care at a cost that is frankly prohibitive and unable to be sustained.”

He continued, “so I came up with this crazy notion that maybe people who are receiving free health care should be expected to do something in exchange.” He argued that 20 hours a week of community service or job training “in exchange for Medicaid benefits is not too much to ask.”

But Gershengorn argued that the state did not provide federal officials with any proof that it can’t afford to sustain the expanded Medicaid program and he noted that the federal government reimburses the states for Medicaid coverage, including more than 90 percent for adults with no children.

Kuhn insisted the state did not have to prove its finances to the Trump administration

Kentucky had estimated that about 95,000 people could lose coverage over five years as part of the changes, which include monthly premiums and call for 20 hours a week of mandatory “community engagement” for able-bodied adults. By expanding Medicaid to include such adults with no children, the state’s Medicaid rolls grew by more than 400,000 people.

Bevin has threatened to revoke the Medicaid expansion if the state can’t make the changes. And Burham, the U.S. Justice Department attorney, argued that revocation would threaten far more people than changes to the program.

“That’s a particularly easy choice for the Secretary,” Burnham said, referring to the HHS Secretary’s decision to approve of Bevin’s changes to the Medicaid program.

But Boasberg challenged him, asking him where the line would be drawn. “You could say no matter what the cuts are, it’s better than nothing,” he said, suggesting the government could say that at least it was covering 10 people rather than zero.

And Gershengorn questioned whether the state could walk back its decision to expand Medicaid, noting a state law requires the governor to pursue federal matching assistance. He suggested that turning away federal dollars could be unpopular as he noted that Bevin is up for re-election in November.

“I have no idea who will prevail,” he said. “And whether having given up 94 percent of federal money is something the people of Kentucky will be happy with.”

The state expanded Medicaid eligibility under Bevin’s predecessor, Gov. Steven Beshear, a Democrat.

When Burnham argued that Kentucky would not “cut” anyone’s Medicaid, but simply require them to work or be engaged in their community, Boasberg noted, “clearly there is going to be coverage loss for people.”

Both government attorneys told the court that the point of the changes is to “make people’s lives better” by getting them engaged in their communities. And Kentucky’s Kuhn said the state planned to use money it saves to provide vision, dental and substance abuse coverage, as well as “fitness-related” services.

But Gershengorn argued that it wasn’t an “acceptable experiment” for “tens of thousands” to lose coverage in exchange for vision, dental and some “gym memberships.”