In approving Medicaid work rules under a waiver program that allows states to spend federal Medicaid funds in ways that would not normally be allowed, Mr. Azar said the objective was to improve health outcomes. Employment, he said, was “positively correlated with health outcomes.”
But the appeals panel noted that experiments approved under the Medicaid waiver program were supposed to be “likely to assist in promoting the objectives” of Medicaid. Mr. Azar, the panel ruled, had not done due diligence to ensure Arkansas work requirements would meet that goal.
In fact, the ruling noted that when the work rule was first proposed, many commenters expressed concerns that it would lead to people losing coverage, but that Mr. Azar had not taken heed.
“The text of the statute includes one primary purpose, which is providing health care coverage without any restriction geared to healthy outcomes, financial independence or transition to commercial coverage,” the ruling said.
The National Health Law Program, joined by Legal Aid of Arkansas, the Southern Poverty Law Center and Jenner & Block, represented the plaintiffs in the case, a group of Medicaid enrollees in Arkansas who were subject to the work requirement.
Work requirements have long been central to the Republican goal of instilling a sense of “personal responsibility” in people who benefit from government programs. Supporters of such rules for Medicaid recipients have said that extending the safety-net program to millions of low-income adults without disabilities, as the Affordable Care Act allowed, gave them an incentive not to work.
But a large portion of Medicaid recipients do already work. According to the Kaiser Family Foundation, 63 percent of adult Medicaid recipients without disabilities have part- or full-time jobs.
As part of a broader quest to reshape the Medicaid program — which covers more than 71 million people, or more than one in five Americans — Ms. Verma last month announced plans to allow states to cap Medicaid spending for many poor adults, a major shift long sought by conservatives. States that participate would have broad flexibility to design coverage for those adults, who are also the population targeted by work requirements.