Suit challenges Michigan's Medicaid work requirements

Lansing — A new lawsuit challenges Michigan's upcoming work requirements for Medicaid recipients, and the insurance of thousands of people could hang in the balance.

On Friday, four Michigan residents filed a federal complaint against Alex Azar, secretary of the U.S. Department of Health and Human Services, the department itself and Seema Verma, the administrator of the Centers for Medicare and Medicaid Services.

The lawsuit alleges that members of President Donald Trump's administration acted outside their administrative authority when they approved a set of conditions on beneficiaries of Michigan's Medicaid expansion program.

The Affordable Care Act, enacted under former President Barack Obama, made the program possible. 

"The defendants’ actions ... seek to undermine the ACA, including its expansion of Medicaid, and represent a fundamental alteration to those statutes," the lawsuit alleges.

Michigan's Medicaid expansion program, known as the Healthy Michigan Plan, has about 656,000 beneficiaries.

Michigan lawmakers and Gov. Rick Snyder approved the program in 2013, extending Medicaid coverage to those with incomes at or below 133% of the federal poverty level, which is about $33,000 for a family of four.

In June 2018, the Michigan Legislature approved work requirements for individuals enrolled in the Healthy Michigan Plan. The law requires able-bodied adults participating in the program to work 80 hours a month, get job training or pursue formal education to keep their health coverage.

In December 2018, the federal Centers for Medicare and Medicaid Services approved an extension of Michigan's program, with the addition of the work requirements. 

The Michigan Chamber of Commerce had urged lawmakers to make changes in the "out of control" Medicaid expansion, noting the program's unexpected explosion in recipients.

A policy in the original state law required the Medicaid expansion insurance program to end if the state’s spending exceeds the program’s savings. Snyder said last year when he signed the work requirement law that it would ensure the continued operation of Healthy Michigan, one of his signature achievements. 

Senate Majority Leader Mike Shirkey, R-Clarklake, previously said the work requirements would improve the lives of Healthy Michigan Plan recipients while keeping the program sustainable as federal subsidies decline.

The implementation of the work requirements is set to begin Jan. 1.

Robert Gordon, director of the Michigan Department of Health and Human Services, has predicted that more than 100,000 people could lose their coverage because of the requirements. In Arkansas, about two-thirds of the people who had to regularly report on their work to comply with that state’s requirements lost coverage, Gordon noted in a past interview.

Before the Michigan-focused lawsuit on Friday, there had already been legal challenges against similar policies in Arkansas, Indiana, Kentucky and New Hampshire.

The plaintiffs in the Michigan case are represented by the Center for Civil Justice, the Michigan Poverty Law Program and the National Health Law Program. The plaintiffs face health problems and other obstacles in meeting the state's work requirements, according to the lawsuit.

One of the plaintiffs is Jamie Arden, 42, of Flushing. According to the lawsuit, Arden is homeless after fleeing her boyfriend's house because of domestic violence. She's a mother of two and a social worker.

Although Arden is contracted to work 40 hours per week, "she only works and is paid when she has appointments scheduled and her clients show up for their appointments," the lawsuit says. 

"The uncertainty about whether she will have to comply with the work requirements is causing her anxiety," the lawsuit says. "She is concerned that she will not always be able to complete 20 hours per week, depending on her caseload at work."

The state has estimated that approximately 400,000 of Michigan's Healthy Michigan enrollees would be subject to the eligibility conditions.

Under Michigan's program, disabled residents, pregnant women, full-time students, children and one parent in a household with a child under the age of 6 are exempt from the work requirements.

cmauger@detroitnews.com