Experimenting On The Health Of The Poor: Inside Stewart v. Azar

By Sara Rosenbaum
Health Affairs Blog, February 5, 2018

As the complaint in Stewart v. Hargan (now Stewart v. Azar), filed on January 24 in federal district court in Washington D.C. makes abundantly clear, both the work experiment solicitation and the approval of Kentucky’s 1115 waiver in its wake are remarkable for the clarity of their intent to use punishment—in the form of denial or loss of health insurance coverage—to promote work. It doesn’t take a wealth of empirical research to conclude that people who are healthy probably are more likely to hold jobs and work more. Furthermore, there is actual empirical research that suggests that the very act of providing access to health care under the ACA expansion has had a positive effect on health and work. There simply is no evidence to support any reasonable hypothesis that health can be promoted by threatening the future and stability of health care for people whose health is worse to begin with and who—owing to the concentrated nature of poverty in the U.S.—tend to live in communities with higher unemployment and reduced job prospects.

Every dimension of the Kentucky demonstration is in play, with no hypothesis other than the assumption that people are healthier when they work. The evidence regarding how Medicaid actually promotes work is not even acknowledged.

This design combines work requirements with new program features that, according to the state, reflect the far less forgiving world of commercial health insurance. In this version of Medicaid, its core objective becomes the inverse of its statutory aim: to limit access as much as possible so that people will stop relying on it.

These hoops are multiple: Work requirements with few, poorly defined exemptions; lengthy loss of coverage for failure to follow additional reporting requirements; stripping away essential benefits with little hope of regaining them; using Medicaid to expose people to the limits of commercial insurance through escalating premiums, delayed enrollment, and elevated cost-sharing; and selectively withholding benefits from people considered undeserving.

(To better understand the lawsuit, an explanation of the plaintiffs’ legal arguments, omitted here, can be accessed at the link below.)

The Limits Of 1115

Medicaid’s core features, essential structure, and express prohibitions on certain types of experiments essentially put the brakes on how far 1115 experiments can go. Furthermore, as the complaint notes, 1115 as an experimental statute has its own brakes. Its agency powers can be invoked only for experiments that further program objectives.

Kentucky’s Aim: Selectively Culling The Eligible Population

Given the fact that federal law bars states from selecting winners and losers among the eligibility groups they cover, what is so striking about the Kentucky experiment is the lengths to which the state and its federal partner have gone to come up with a strategy, under the guise of experimentation, for selectively culling the Medicaid population.

Final Thoughts

Despite its historic role in shaping Medicaid policy, however, 1115 is a statute that grants limited powers. At its heart, 1115 is designed to fulfill a specific purpose: to enable Medicaid to better achieve its objectives. What makes the January 11 Medicaid work solicitation and the Kentucky approval such outliers is the singular absence of an experiment that promotes Medicaid’s core objectives. The relationship between work and health is axiomatic but this axiom alone cannot serve as the basis for threatening insurance coverage for people who cannot fulfill work requirements.

Indeed, so far afield from Medicaid’s objectives are the Administration’s work experiments that, in its solicitation, the Administration makes clear that it will permit no federal funds to be claimed for costs associated with work supports, nor will it permit states to keep savings attributable to the loss of eligibility for reinvestment in other Medicaid activities. These two fundamental caveats drive home the degree to which the Trump Administration has essentially admitted that, rather than advancing policy goals involving health care for the poor, Medicaid work experiments undermine them.


For another opinion on the legality of Medicaid work requirements, by Nicholas Bagley, JD:


Nicolas Bagley writes, “But the courts have not been moved by the argument—true though it may be—that Congress never meant for section 1115 to be a vehicle for the adoption of sweeping, controversial, and partisan reforms to Medicaid. Instead of winning in court, the opponents of work requirements may need to win some elections.”

Medicaid was established to help low-income individuals receive the health care that they need. Section 1115 waivers were established to allow states to make modifications within the Medicaid program to better achieve that goal. The Trump administration is now undermining that goal by using the waivers to punish Medicaid beneficiaries by denying health care if unemployed. The legality is being challenged.

In her full article Sara Rosenbaum describes the legal principles and how HHS/CMS is undermining them. Nicholas Bagley also discusses the legal issues while making the very important point that the moral foundation ultimately is determined by our action as voters. We get what we choose.

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