DC Appeals Court Panel unanimously agrees: Medicaid work requirements are arbitrary, capricious...and unconstitutional.

This just broke moments ago, so I don't have a lot of details, but the bottom line is this:

US Appeals Court in DC rules today that Trump admin. unlawful in approving Arkansas Medicaid work requirement

— Stephanie Armour (@StephArmour1) February 14, 2020

Here's the opinion itself.

As always, University of Michigan Law Professor Nicholas Bagley has the skinny:

It's a clean win for the plaintiffs, and it comes in a short, decisive opinion written by Judge Sentelle -- a very conservative Reagan appointee. 

Before: PILLARD, Circuit Judge, and EDWARDS and SENTELLE, Senior Circuit Judges. Opinion for the Court filed by Senior Circuit Judge SENTELLE.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

The analysis announces a principle that basically dooms the Trump administration's defense of the work requirements at the start. 

A. Objective of Medicaid The district court is indisputably correct that the principal objective of Medicaid is providing health care coverage.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

How does Sentelle know that health coverage, and not health simpliciter, is the key purpose of Medicaid? He points to a provision governing Medicaid appropriations.

While the Medicaid statute does not have a standalone purpose section like some social welfare statutes, see, e.g., 42 U.S.C. § 601(a) (articulating the purposes of the Temporary Assistance for Needy Families program); 42 U.S.C. § 629 (announcing the “objectives” of the Promoting Safe and Stable Families program), it does have a provision that articulates the reasons underlying the appropriations of funds, 42 U.S.C. § 1396-1. The provision describes the purpose of Medicaid as:

to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

He also cites a bunch of cases from other circuit courts. But he's just not buying the claim that health is a freestanding purpose of Medicaid. 

The statute and the case law demonstrate that the primary objective of Medicaid is to provide access to medical care. There might be secondary benefits that the government was hoping to incentivize, such as healthier outcomes for beneficiaries or more engagement in their health care, but the “means [Congress] has deemed appropriate” is providing health care coverage. MCI Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 231 n.4 (1994). In sum, “the intent of Congress is clear” that Medicaid’s objective is to provide health care coverage, and, as a result, the Secretary “must give effect to [that] unambiguously expressed intent of Congress.” Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984).

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

That means he's pretty unhappy that the approval of the work requirements waivers dwelled on other objectives.

Instead of analyzing whether the demonstration would promote the objective of providing coverage, the Secretary identified three alternative objectives: “whether the demonstration as amended was likely to assist in improving health outcomes; whether it would address behavioral and social factors that influence health outcomes; and whether it would incentivize beneficiaries to engage in their own health care and achieve better health outcomes.”

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

Or to put it different, Congress doesn't share HHS's view about what Medicaid is for.

The means that Congress selected to achieve the objectives of Medicaid was to provide health care coverage to populations that otherwise could not afford it.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

Sentelle also doesn't think that HHS really relied on the purpose of transitioning beneficiaries away from government benefits. And he's not going to accept that "post hoc rationalization" for its decision.

To an extent, Arkansas and the government characterize the Secretary’s approval letter as also identifying transitioning beneficiaries away from governmental benefits through financial independence or commercial coverage as an objective promoted by Arkansas Works. Ark. Br. 14, 37–42; Gov’t Br. 24–25, 32. This argument misrepresents the Secretary’s letter.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

But even if the court did consider it, it's a loser. Congress knows how to add work requirements to welfare programs, and it didn't do so here. 

Nor could the Secretary have rested his decision on the objective of transitioning beneficiaries away from government benefits through either financial independence or commercial coverage. When Congress wants to pursue additional objectives within a social welfare program, it says so in the text. For example, the purpose section of TANF explicitly includes “end[ing] the dependence of needy parents on government benefits by promoting job preparation, work, and marriage” among the objectives of the statute. 42 U.S.C. § 601(a)(2). Also, both TANF and the Supplemental Nutrition Assistance Program (SNAP) condition eligibility for benefits upon completing a certain number of hours of work per week to support the objective of “end[ing] dependence of needy parents on government benefits.” 42 U.S.C. §§ 601(a)(2), 607(c) (TANF); 7 U.S.C. § 2015(d)(1) (SNAP). In contrast, Congress has not conditioned the receipt of Medicaid benefits on fulfilling work requirements or taking steps to end receipt of governmental benefits.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

With that background in mind, the rest of the decision is easy. What about all those people who will lose coverage, Sentelle asks? HHS's response was ... less than compelling.

In total, the Secretary’s analysis of the substantial and important problem is to note the concerns of others and dismiss those concerns in a handful of conclusory sentences. Nodding to concerns raised by commenters only to dismiss them in a conclusory manner is not a hallmark of reasoned decisionmaking.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

The court acknowledges that there's some reasoning based on other, competing purposes for Medicaid other than providing health insurance. But those purposes aren't part of what Medicaid is about.

The crucial difference in this case is that the Medicaid statute identifies its primary purpose rather than a laundry list. The primary purpose is:

to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

And so here's the kicker:

Importantly, the Secretary disregarded this statutory purpose in his analysis. While we have held that it is not arbitrary or capricious to prioritize one statutorily identified objective over another, it is an entirely different matter to prioritize non-statutory objectives to the exclusion of the statutory purpose.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

What does this all mean for work requirements? Unless and until the Supreme Court reviews the case, we can expect all work requirements nationwide to be halted.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

As of right now, only one state has active work requirements: Michigan. And a lawsuit that's been filed in D.C. before Judge Boasberg will soon yield the invalidation of Medicaid's waiver, almost certainly prior to the date in May when people would start losing coverage.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

NOTE: This isn't actually the case, as Bagley later conceded--Utah's Medicaid work requirement program has also just gone into effect as well...and will presumably also be halted immediately.

Having said that, other states including Indiana, Arizona, Montana and Virginia...all of which were scheduled to ramp up Medicaid work requirements...had already either delayed or scrapped that provision entirely in recent months in anticipation of exactly this decision coming down the line.

Embarrassingly, my own state of Michigan still plodded ahead with OUR work requiremement program starting just six weeks ago...even though Democratic Governor Gretchen Whitmer implored Republican lawmakers to put a hold on the program for this very reason.

Her pleas fell on deaf ears, of course, so Michigan has now, by my count, flushed at least $29 million in taxpayer money (and potentially as much as $69 million depending on the timing) on a boondoggle which never made any sense in the first place and now is completely pointless anyway.

The Trump administration will probably appeal this decision to the Supreme Court, but it's hard to make a case for special urgency, especially since it's trying to slow-roll the constitutional challenge to the ACA.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

So if the Supreme Court agrees to hear the case -- and I think it probably will -- we're talking about an argument sometime in the fall or winter, followed by a decision in late spring of 2021.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

In the meantime, we'll have had an election. If a Democrat wins, these work requirements will be revoked post-haste. Game over.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

If Trump wins, what happens next will depend on the Supreme Court. Sentelle's vote here augurs well, but I wouldn't be surprised if at least some and maybe all of the conservatives disagree.

— Nicholas Bagley (@nicholas_bagley) February 14, 2020

So the election really matters here, not only for the ACA writ large, but also for work requirements in 20 states that could kick hundreds of thousands of people off of Medicaid. Get out there and vote, people! /fin

— Nicholas Bagley (@nicholas_bagley) February 14, 2020