Medicaid enrollees sue federal agencies, officials, alleging Ky Medicaid changes violated the law

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By Al Cross
Kentucky Health News

Sixteen Kentucky Medicaid enrollees filed a class-action lawsuit in Washington Wednesday, claiming that federal officials violated federal law this month by approving changes to Kentucky Medicaid and declaring their intent to approve similar changes in other states.

The lawsuit alleges that work requirements in the program, to be phased in starting July 1, “sharply deviate from the congressionally established requirements of the Medicaid program and vastly exceed any lawful exercise” of the Department of Health and Human Services’ authority to waive Medicaid rules for experiments that advance the goals of the program.

The suit also charges that HHS violated the law by authorizing income-based premiums to be paid by Medicaid enrollees, from $1 a month to 4 percent of their household income; locking people out of the program for failing to meet requirement, including paying premiums and making reports; by requiring cost-sharing for non-emergency use of an emergency room; and eliminating payment for non-emergency medical transportation.

“This case challenges the efforts of the Executive Branch to bypass the legislative process and act unilaterally to ‘comprehensively transform’ Medicaid, the cornerstone of the social safety net,” the suit says. “The Executive Branch has instead effectively rewritten the statute, bypassing congressional restrictions, overturning a half century of administrative practice, and threatening irreparable harm to the health and welfare of the poorest and most vulnerable in our country.”

In addition to the work and premium requirements, the suit also says the Kentucky plan violates federal law by eliminating of three months’ retroactive coverage for disqualified enrollees who re-enroll. The suit says the plaintiffs will be unable to meet the plan’s administrative requirements, and “Continuous and adequate health insurance coverage is fundamental for each plaintiff’s ability to work.” It describes each plaintiff’s situation in detail, taking up 30 pages of the 79-page complaint.

The first is Ronnie Stewart, 62, of Lexington. The suit said he retired from a job as a hospital assistant because he can’t be on his feet all day, and suffers from arthritis, diabetes and high blood pressure. It says his his sole income is $841 monthly Social Security but his estimated expenses are $1,035 per month and he can’t afford to pay premiums for Medicaid and still buy food and pay rent.

“He is concerned that he will lose his health coverage if he is unable to work because of his health or if he takes a job with varying work hours,” the suit says. “In addition, Mr. Stewart will be at risk of being locked out of Medicaid coverage if he is unable to file or fails to file required reports, including reports within 10 days about changes in his income that would affect eligibility,” as the changes will require.

Stewart is the oldest of the 16 plaintiffs, who are as young as 20 and come from several areas of the state (Louisville, Lexington, Bowling Green, Covington, Ludlow, Ashland, Radcliff, Berea, Salyersville, Martin and the nearby Floyd County crossroads of Dwale). They are represented by the National Health Law Program, a public-interest law firm; the Kentucky Equal Justice Center; and the Southern Poverty Law Center. The defendants are HHS, its Centers for Medicare and Medicaid Services and their top officials. There are no Kentucky defendants.

The suit notes that Gov. Matt Bevin’s stated goal for the waiver was “to comprehensively reform Medicaid,” and argues that “States cannot impose additional eligibility requirements that are not explicitly allowed by the Medicaid Act.” It cites the federal law on waivers, which does not contain such an explicit prohibition.

The suit says the state anticipated that with the changes, “more than 95,000 adults would lose Medicaid coverage altogether.” Actually, it said that in five years, the Medicaid rolls would have 95,000 fewer people with the changes than without them, partly because of non-compliance. Tens of thousands of people go on and off Medicaid each month. The program covers 1.4 million Kentuckians.

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