Gov. Matt Bevin

A federal judge vacated the Trump administration’s approval of Kentucky’s Medicaid 1115 waiver in a ruling Friday afternoon, abruptly halting the state’s new Kentucky HEALTH program that the administration of Gov. Matt Bevin was set to begin implementing on Sunday.

Judge James Boasberg of the U.S. District Court of D.C. ruled that although the secretary of the Department of Health and Human Services is afforded significant deference in approving pilot projects like that of Kentucky’s, a review of the agency’s approval of Kentucky’s waiver in January shows significant omissions that warrant it to be vacated and remanded back to HHS for further review.

“Such review reveals that the Secretary never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid,” wrote Boasberg. “This signal omission renders his determination arbitrary and capricious.”

The now-blocked Kentucky HEALTH program requires “able-bodied” Medicaid recipients to pay premiums and have a certain number of “community engagement” hours per week, which includes work, volunteering or training.

The approval of this waiver by the Trump administration was immediately challenged in federal court by 15 Medicaid recipients in Kentucky, who filed a lawsuit arguing that this violated federal law and would put the health care coverage of tens of thousands of Kentuckians at risk.

Bevin followed this lawsuit by issuing an executive order directing his Cabinet for Health and Human Services to end Medicaid expansion in Kentucky — under which nearly 500,000 in the state gained coverage — if any part of his waiver is blocked by a legal challenge in the court system. Cabinet Secretary Adam Meier reaffirmed in a committee meeting last week that if Boasberg handed down an adverse ruling, he would immediately evaluate rolling back Medicaid expansion, arguing that the state could not afford to cover such individuals without the waiver program.

The governor had not commented on the ruling as of Friday evening, but his official Twitter account did post a statement from Meier that Boasberg’s decision “invalidates Kentucky HEALTH on a very narrow basis,” and they “look forward to working with (Centers for Medicare and Medicaid Services) to quickly resolve the single issue raised by the Court so that we can move forward with Kentucky HEALTH.”

However, Meier’s statement added that “without prompt implementation” of the program, “we will have no choice but to make significant benefit reductions.”

Bevin’s executive order from January stated that Medicaid expansion would be eliminated “no later than six months from the date on which all appeals of the judgment have been exhausted or waived, or otherwise as soon as legally practicable under the remaining terms” of the waiver plan, applicable statutes or regulations.

In his ruling Friday, Boasberg stated that Kentucky’s waiver indicated 95,000 people would lose Medicaid coverage in the first five years of the program, “yet the Secretary paid no attention to that deprivation. Nor did he address how Kentucky HEALTH would otherwise help ‘furnish . . . medical assistance.’ In other words, he glossed over ‘the impact of the state’s project’ on the individuals whom Medicaid ‘was enacted to protect.'”

In the face of warnings that new requirements in the program for Medicaid recipients would cause them to lose coverage, Boasberg noted a “stunning” lack of discussion about that effect.

“For starters, the Secretary never once mentions the estimated 95,000 people who would lose coverage, which gives the Court little reason to think that he seriously grappled with the bottomline impact on healthcare,” wrote Boarsberg. “Nor did he ‘request . . . additional information related to the project’s impact on recipients’ or offer ‘any information refuting plaintiffs’ substantial documentary evidence’ that the action would reduce healthcare coverage.”

Anne Marie Regan, the senior attorney for the Kentucky Equal Justice Center — one of three nonprofits representing the plaintiffs — issued a statement that they are very pleased that the ruling “recognizes that Kentucky’s Medicaid waiver would not have furthered the purpose of Medicaid, which is to provide medical care to those who cannot afford it.  Instead, the waiver would have reduced medical services, set up bureaucratic barriers to care and resulted in nearly 100,000 Kentuckians losing Medicaid.  We need to refocus on continuing to improve overall health, as Kentucky has been able to do since expanding Medicaid.”

Emily Beauregard, the executive director for Kentucky Voices for Health — a coalition of nonprofits advocating for health care access — issued a statement applauding the court’s decision “to support Kentuckians on Medicaid by refusing to create additional barriers.”

“Kentucky’s Medicaid population consists of hardworking parents, caregivers, and other community members who need access to healthcare,” stated Beauregard. “During the waiver comment period, over 3,000 Kentuckians voiced their opinion on the devastating effects of this policy, and the court heard those voices.”

This story has been updated.