These consolidated cases stem from the January 2018 announcement of a new policy by the Centers for Medicare and Medicaid Services (CMS) that, for the first time, allowed states to condition Medicaid eligibility on working or participating in a “community engagement” program. These work requirements were permitted under the waiver provision of Section 1115 of the Social Security Act, which grants the Secretary of the U.S. Department of Health and Human Services (HHS) the authority to waive a state’s compliance with certain requirements of the Medicaid Act only for an “experimental, pilot, or demonstration project” likely to help promote the objectives of the Medicaid Act.
Arkansas and New Hampshire were among the first states to receive approval for their waivers, which included work requirements for the Medicaid expansion population. The Arkansas demonstration waiver program, known as Arkansas Works Amendments, requires people between the ages 19 and 49 to prove that they worked or volunteered for 80 hours per month (with some exemptions) or lose Medicaid eligibility. Gresham v. Azar, 363 F. Supp. 3d 165, 171–72 (D.D.C. 2019). Those who failed to provide documentation for three months in a calendar year lost coverage for the rest of the calendar year. Id. at 172.
The New Hampshire demonstration project, called the Granite Advantage Health Care Program, conditioned Medicaid coverage for most non-disabled adults ages 19 to 64 on completion of 100 hours per month of work or other community activities. Philbrick v. Azar, 397 F. Supp. 3d 11, 18 (D.D.C. 2019). Those who did not comply were required to make up hours, prove they fell within an exemption, or lose coverage. Id.
Arkansas and New Hampshire each faced challenges in implementing their waivers. When Arkansas implemented its waiver, more than 18,000 beneficiaries lost coverage. A review of the program found that over 95 percent of people who lost coverage were either working or qualified for an exemption.
Similarly, within the first month of New Hampshire’s attempt to implement Granite Advantage, approximately 17,000 non-exempt beneficiaries had not documented their compliance. NH Medicaid Granite Advantage Program Update: Work and Community Engagement Requirements Temporarily Suspended, Univ. of New Hampshire (July 19, 2019). As a result, New Hampshire paused implementation of the work requirement. The State acknowledged in a July 2019 letter that the roll-out efforts were unsuccessful and that enforcement would “more likely than not lead to persons losing coverage.”
Medicaid beneficiaries in Arkansas, Kentucky, New Hampshire, Indiana, and Michigan challenged HHS’s approval of their state work-requirement waivers in separate cases in federal district court. See Gresham, 363 F. Supp. 3d at 165 (D.D.C. 2019) (Arkansas); Stewart v. Azar, 308 F. Supp. 3d 239 (D.D.C. 2018) (Kentucky); Philbrick, 397 F. Supp. 3d at 11 (New Hampshire); Complaint, Rose v. Azar, 1:19-cv-02848 (D.D.C. Sep. 23, 2019) (Indiana); Complaint, Young v. Azar, No. 1:19-cv-03526 (D.D.C. Nov. 22, 2019) (Michigan). The Arkansas beneficiaries claimed that the Secretary’s approval of these waivers violated the Administrative Procedure Act. Gresham, 363 F. Supp. 3d at 168-69. They also claimed that the waivers placed them in danger of losing Medicaid, and, thus, access to needed health care. Id. at 174. The district court agreed with them, finding that the federal government could not approve changes to state Medicaid programs that are inconsistent with the core objective of the Medicaid program: to furnish medical assistance to low-income people and people with disabilities. Id. at 181. The district court reached the same conclusion regarding the New Hampshire program. Philbrick, at 11.
The federal and state defendants appealed the district court’s decisions concerning the Arkansas and New Hampshire programs to the D.C. Circuit Court of Appeals. Gresham v. Azar, 950 F.3d 93 (D.C. Cir. 2020); Philbrick v. Azar, No. 19-5293, 2020 WL 2621222 (D.C. Cir. May 20, 2020). The court of appeals affirmed the lower court’s decisions. Gresham, 950 F.3d. at 233; Philbrick, supra, at *1. Defendants petitioned the Supreme Court to accept the cases for review. Petition for Writ of Certiorari, Azar v. Gresham (No. 20-37). AARP, AARP Foundation, and other organizations filed an amicus brief in support of the Medicaid beneficiaries, explaining how the waivers could harm older adults, people with disabilities, and people with chronic conditions by stripping them of life-changing health care coverage gains.
