WASHINGTON — Just two days after a federal court struck down work requirements for Medicaid beneficiaries in Arkansas and Kentucky, the Trump administration approved similar requirements in Utah on Friday.
The administration acknowledged that some Utah residents might lose coverage, but said that others would become healthier and gain financial independence because they were working.
In approving a Medicaid waiver for Utah, the Trump administration is reaffirming its conservative priorities, defying critics and inviting another round of litigation.
Under the new Utah program, 70,000 to 90,000 adults will become eligible for Medicaid, and they can begin applying for coverage on Monday. The waiver has a novel feature to control costs: Utah can freeze enrollment of newly eligible beneficiaries if the projected costs of their coverage exceed the funds appropriated by the State Legislature.
Seema Verma, the administrator of the federal Centers for Medicare and Medicaid Services, who approved the waiver, said that Utah had found a “fiscally sustainable” way to cover more people.
Utah voters in November approved a full expansion of Medicaid as envisioned in the Affordable Care Act, to cover people with annual incomes up to 138 percent of the poverty level — up to about $17,235 for an individual. But state legislators had different ideas and approved a more limited expansion, to 100 percent of the poverty level, or $12,490 for an individual, with work requirements. That is the program approved on Friday.
In her approval letter, Ms. Verma said the work requirements could help people achieve financial independence and obtain jobs providing health insurance.
“If participating in community engagement activities improves beneficiaries’ physical and mental health,” Ms. Verma wrote, “these beneficiaries may consume fewer health care resources, thus keeping in check state costs on Medicaid.”
“Some beneficiaries could lose coverage, at least temporarily, for failure to comply” with the work requirements, Ms. Verma said.
But she said the Utah program had safeguards, including exemptions from the work requirements for certain people who were disabled, caring for children under the age of 6 or being treated for drug addiction.
Medicaid is an open-ended entitlement program, meaning that benefits are generally available to anyone who meets eligibility criteria established by the federal and state governments.
Ms. Verma defended the enrollment limits as a way for Utah to keep within its budget, so it would not have to cut benefits.
Gov. Gary R. Herbert of Utah, a Republican, welcomed approval of the state program, describing it as “an important first step in covering vulnerable Utahans in a financially sustainable way.”
But Joan C. Alker, the executive director of the Center for Children and Families at Georgetown University, said: “Utah’s enrollment cap is in direct conflict with Medicaid’s guarantee of coverage if you meet the income eligibility requirements. As a legal matter, it is even more questionable than the waivers struck down in Arkansas and Kentucky.”
Ms. Verma approved the Utah waiver in an 8,500-word letter that repeats many of the points rejected on Wednesday in the Arkansas and Kentucky cases by Judge James E. Boasberg of the Federal District Court for the District of Columbia.
Utah’s demonstration project promotes the health of beneficiaries and their financial independence, Ms. Verma said. Research shows a positive link between employment and “improved health outcomes,” she wrote.
Judge Boasberg said that the waivers in Arkansas and Kentucky could not be justified as contributing to either the financial independence of Medicaid beneficiaries or the “fiscal sustainability” of the program for a state. Those, he said, are not independent objectives of the federal Medicaid law, and waivers are supposed to promote those objectives.
The court rulings on Arkansas and Kentucky are not binding on federal officials as they consider proposals from other states. Federal officials can try to argue that the work requirements in Utah are somewhat different from those in Arkansas and Kentucky.
Matthew Slonaker, the executive director of the Utah Health Policy Project, a nonprofit group that supported the full expansion of Medicaid, said, “The work requirements here are legally vulnerable, just like those in Arkansas and Kentucky.”
The changes in Utah approved on Friday fall short of the expansion of Medicaid envisioned in the Affordable Care Act and endorsed by Utah voters in November.
But Utah is liberalizing its current eligibility criteria. Many poor people in Utah have been ineligible for Medicaid if they do not have dependent children. The state Medicaid program has covered parents with incomes up to 60 percent of the poverty level, or about $7,500 for an individual. Utah has also extended coverage to about 3,000 adults with income below 5 percent of the poverty level, about $625 a year.
“As a condition of eligibility” in Utah, beneficiaries covered under the waiver will have to register for work through the state’s online system. They will have to complete an online assessment of their job training needs and an online training program. In addition, they will have to apply for jobs with at least 48 potential employers.
Under the Utah waiver, the federal government will pay about 70 percent of Medicaid costs for the newly eligible beneficiaries. If the state had fully expanded Medicaid, the federal government would have paid at least 90 percent.
Utah officials are eager to obtain federal approval for two more changes in their Medicaid program. They want to get additional federal payments — the enhanced 90 percent federal share — without extending eligibility to people above the poverty level. And they want permission to impose some kind of per-person limits on Medicaid spending, which would be a huge change in the way Medicaid is financed.
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