Class Action Lawsuit Challenges Kentucky’s Medicaid Changes

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On Wednesday, Kentucky Medicaid beneficiaries filed a class action lawsuit challenging the state’s experimental programs that require low-income residents to work.

Lawyers from the National Health Program, the Southern Poverty Law Center and the Kentucky Equal Justice Center filed the Kentucky Medicaid class action lawsuit on behalf of two plaintiffs.

“The Medicaid program provides health insurance to more than 75 million low-income people in the United States,” the Kentucky Medicaid class action lawsuit says. “Medicaid enables states to provide a range of federally-specified preventative, acute, and long-term health care services ‘whose income and resources are insufficient to meet the costs of necessary medical services.’”

According to the Medicaid class action lawsuit, the core populations Medicaid covers include children; aged, blind or disabled persons; and adults with a household income of less than 133 percent of the federal poverty level.

When a state decides to participate in the Medicaid program, the federal government contributes a significant amount of the cost of providing care. The state pays the remaining portion of the costs of care and agrees to follow all of the federal Medicaid requirements, including those for eligibility and scope of coverage.

“States may not impose additional eligibility requirements other than those set forth in the Medicaid Act, and states cannot pick and choose among individuals within a covered population group,” the Kentucky Medicaid class action lawsuit alleges.

The Medicaid class action lawsuit alleges that Kentucky Governor Matt Bevin applied for a waiver of various Medicaid Act requirements in order to implement its “Kentucky HEALTH” project, which sought to require Medicaid enrollees to work in order to receive health insurance. Bevin’s stated goal was to “comprehensively transform Medicaid,” the Kentucky Medicaid class action lawsuit states.

“By the State’s own estimate, Kentucky HEALTH would reduce Medicaid enrollment over a five-year period by over 95,000 adults and reduce payments for health care for low income Kentuckians by approximately $2.4 billion,” the Medicaid class action lawsuit says.

On Jan. 11, the Centers for Medicare and Medicaid Services (CMS) released new guidelines that allow states to cut benefits for those who are unemployed, not enrolled in school, and those who are not participating in “community engagement” activities such as job training, volunteering or caregiving.

The 16 plaintiffs named in the Kentucky Medicaid class action lawsuit accuse CMS of exceeding its authority because Congress is the only regulatory agency with the power to change Medicaid law. Although some experimental programs are allowed, they may only proceed if the programs abide by Medicaid objectives and they fall within narrow circumstances.

Representatives for the plaintiffs fear that they may be unable to meet Kentucky’s new Medicaid requirements. Many of the plaintiffs are low-income and have significant health issues that limit their ability to perform work that would satisfy the new Medicaid requirements.

The Kentucky Medicaid class action lawsuit was filed on behalf of the plaintiffs and a proposed Class of all Kentucky residents who are enrolled in the Kentucky Medicaid program on or after Jan. 12, 2018.

The plaintiffs are seeking declaratory and injunctive relief.

The plaintiffs are represented by Jane Perkins, Catherine McKee, Sarah Somers of National Health Law Program; Anne Marie Regan and Cara Stewart of Kentucky Equal Justice Center; Samuel Brooke, Emily C. R. Early, and Neil K. Sawhney of Southern Poverty Law Center.

The Kentucky Medicaid Class Action Lawsuit is Stewart, et al. v. Eric Hargan, Acting Secretary United States Department of Health and Human Services, et al., Case No. 1:18-cv-00152-JEB, in the U.S. District Court for the District of Columbia.