Judge Strikes Down New Hampshire’s Work Requirements

July 30, 2019 - New Hampshire’s proposal to create work requirements for Medicaid went the same path as Kentucky’s and Arkansas’ did earlier this year, with a federal judge striking down the Section 1115 demonstration waiver earlier this week.

Judge James E. Boasberg, who also penned the ruling striking down the 1115 waivers in Kentucky and Arkansas, said the New Hampshire proposal didn’t meet key standards.

 “At the heart of this review is an assessment of ‘whether the decision was based on a consideration of the relevant factors.’ For the fourth time, HHS has fallen short of this fundamental administrative law requirement,” Judge Boasberg wrote in his memorandum.

The requirement, approved by HHS in 2018, expanded New Hampshire’s Medicaid program so that non-disabled Medicaid beneficiaries between the ages of 19 and 64 must complete 100 hours of qualifying employment or community service per month.

Similar statutes have been pursued by Kentucky and Arkansas, but New Hampshire’s Medicaid expansion was planning to be more extensive than its predecessors. It has a higher hour requirement—100 as opposed to 80—and an age range that is 15 years longer. Arkansas’s stopped at age 49.

The lawsuit centered on Ian Ludders, a 40-year-old agricultural worker who claimed his access to healthcare coverage would be harmed should the requirements go into effect. Ludders filed on the grounds that because his work is seasonal, he would not be able to comply with the law and would therefore, his lawyers argue, unjustly lose his coverage.

The judge said that HHS Secretary Alex Azar failed to take into account Medicaid recipients like Ludders who would lose coverage unnecessarily.

The court argued that the Secretary’s approval failed to avert the risk of coverage loss and promote coverage.

HHS did admit that the work requirement would lead to coverage loss, which the agency did not acknowledge in either the Arkansas nor the Kentucky cases.

However, the Secretary did not provide an estimate of how many Medicaid beneficiaries would lose coverage. The Secretary also did not respond to the Kaiser Family Foundation’s projection of between 2,600 and 7,500 enrollment loss, the judge pointed out.

HHS had argued that it did take risk of coverage loss into account because they mention it throughout the CMS’s approval letter. However, according to Judge Boasberg, HHS never addressed potential coverage losses that could arise if a beneficiary could not adequately report her work hours.

“Acknowledging the possibility of coverage loss is not the same as analyzing that possibility,” the judge responded in his memorandum.

HHS argued that New Hampshire’s work requirement would extend coverage because without it, the state would end coverage of the new adult group outlined in its Medicaid expansion plans. The agency also cited the exemptions as sufficient to prevent residents from losing coverage unnecessarily, stating that the requirement was designed to avoid coverage losses.

However, like his previous reply, Judge Boasberg stated, “that a project is intended to avoid coverage loss does not mean that it will do so.”

He noted that protections were in place for both Kentucky and Arkansas, and the states nevertheless saw coverage losses of around 95,000 in one year and 17,000 in half a year, respectively.

A similar narrative was already beginning to play out in New Hampshire. After five months of delays, New Hampshire set a deadline for reporting work hours, stating that those who did not report their compliance would lose coverage on August 1.

As of July 8, 68 percent of non-exempt Medicaid beneficiaries had not reported their work requirement hours.

This lack of beneficiary response—along with the challenge of reaching people subject to community-engagement requirements—forced the state to postpone their implementation until September 30, meaning those who failed to report would lose coverage on December 1. It also expanded its exemptions.

With this history in court, the seven states whose Medicaid expansion work requirements are pending and the seven whose Medicaid expansions have been approved but not yet implemented have significant data to use as they build their own programs.