Half of states are suing over new Medicaid eligibility requirements that advocates have warned will lead people with disabilities to lose coverage.
A coalition of officials from 25 states and Washington, D.C. filed a lawsuit last week challenging recently released rules for Medicaid work requirements.
Under the mandate, which most states must implement by the beginning of next year, many beneficiaries will need to prove that they are working, volunteering or going to school at least 80 hours per month in order to retain coverage.
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The new requirements were part of a sweeping law Congress approved last summer that included nearly $1 trillion in Medicaid cuts. The measure does include exemptions for people who are “medically frail” or who have “special medical needs” including those with physical, intellectual or developmental disabilities. However, an interim final rule issued by the Centers for Medicare and Medicaid Services, or CMS, in early June set narrow limits on who qualifies.
Not only will individuals need to have a qualifying condition, but that condition must also significantly limit their ability to work, according to the interim final rule.
In the lawsuit filed against CMS and the U.S. Department of Health and Human Services, the states allege that the Trump administration’s interim final rule is more restrictive than Congress intended. The complaint also names CMS Administrator Mehmet Oz and HHS Secretary Robert F. Kennedy Jr.
“People with disabilities, patients in the middle of cancer treatment, or those struggling with another serious or complex health condition, shouldn’t be at risk of losing the care that helps maintain their health,” reads the lawsuit filed in the U.S. District Court for the District of Massachusetts. “Nowhere in (the law) does Congress state that individuals’ ability to work must be impaired in order to be ‘medically frail or otherwise have special medical needs,’ or to have a ‘serious or complex medical condition.’”
The states say that the rule puts them in an “untenable position” and violates the Administrative Procedures Act by ignoring “substantial evidence” that the “added administrative burdens will cause individuals who are eligible for Medicaid to lose or be denied coverage.” They also claim that the narrow definition of “medically frail” violates the law and that the rule fails to consider significant harms to states, Medicaid beneficiaries and others. In addition, the lawsuit alleges that the rule is unconstitutional since it imposes new requirements that run counter to preliminary guidance provided by federal officials, upending months of planning.
“This eleventh hour attempt to further narrow protections for medically frail Medicaid recipients seeks to punish those who cannot fend for themselves. Further, this administration is once again attempting to sidestep Congress by unlawfully reinterpreting the law, and coercing the states to rush to implement their last-minute changes or face penalties,” said Rhode Island Attorney General Peter F. Neronha who is part of the suit.
The work requirements apply to individuals covered under Medicaid expansion. Most people with developmental disabilities qualify for Medicaid because they are eligible for Supplemental Security Income and would not be subject to the new mandate, advocates say.
“However, that does not mean people with developmental disabilities are fully protected,” said Kim Musheno, senior director of Medicaid policy at The Arc of the United States. “Some people with IDD may be enrolled through Medicaid expansion because they are waiting for SSI, do not meet SSI’s strict income or asset rules, have not been formally determined disabled or are covered through another pathway. Those individuals may have to prove they qualify for an exemption. The law may say people with disabilities should be exempt, but the process for proving that exemption can still cause people to lose coverage.”
Moreover, advocates fear that even those who should be untouched by work mandates could be unintentionally impacted by new paperwork requirements.
“We know from experience that paperwork kills coverage,” said Nicole Jorwic, chief program officer at Caring Across Generations. “Nothing I have a seen gives me confidence people eligible through the SSI pathway won’t also be caught up as states grapple with this overstep via regulations.”
In addition to Rhode Island, the lawsuit includes attorneys general from Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Vermont, Virginia, Washington, Wisconsin and Washington, D.C., as well as the governors of Kentucky and Pennsylvania. They are asking the court to toss out certain provisions of the interim final rule.
CMS said it does not comment on pending litigation.
