A Legal Battle Is Mounting Against the GOP’s Attack on Medicaid

About 500 protesters chanting “Kill the Bill, Don’t Kill Us!” filled the street outside the New York Stock Exchange on December 19, 2017 — where the resources siphoned from the poor and middle class by the Republican tax bill will be concentrated. (Photo: Erik McGregor / Pacific Press / LightRocket via Getty Images)

In Kurt Vonnegut’s 1965 book, God Bless You, Mr. Rosewater, the protagonist inherits a massive sum of money from his wealthy family. Rosewater, who has no use for the American class system, decides the money should be spent on a foundation that gives money and love to people who are deemed as “useless to society” by the “rapacious citizens who have come to control all that is worth controlling in America.”

He is taken to court by an irate family whose lawyers argue that such unconditional generosity is evidence of mental instability. Vonnegut’s alter ego, Kilgore Trout, feels otherwise, saying this kindness meant “our hatred of useless human beings and the cruelties we inflict upon them for their own good need not be parts of human nature.”

It is fitting that this book was released the same year Medicaid was passed. Vonnegut’s disgust at this sinister view on humanity stands out as we watch the GOP’s latest effort to reshape Medicaid in all sorts of regressive ways in states across the US. In January, President Trump made the unprecedented decision to allow states to add work requirements and other obstacles to Medicaid by applying for a waiver from the administration. It is a backhanded way of achieving one of the many goals of the failed Trumpcare bill: gutting Medicaid.

With no help coming from the Republican-controlled Congress, the fight is headed to the courts. The first of what might be many lawsuits was filed in federal court on January 24 — a class-action lawsuit in Kentucky, the first state to receive such a waiver. On Friday, February 2, Indiana got approval for a very similar plan. Lawyers and activists are readying for much the same in eight other states that have applied for a waiver.

“We are calling on the federal court to step in and stop the Trump administration from rewriting the Medicaid Act and stripping Kentuckians of vital health care,” said Jane Perkins of the National Health Law Program (NHeLP), which is among several organizations involved in the Kentucky lawsuit.

These provisions were announced in a letter to state Medicaid directors by Seema Verma, the Trump-appointed head of the Centers for Medicare and Medicaid Services (CMS). Verma has spent much of her life trying to make life harder for Medicaid recipients, which has some Democrats arguing her involvement in this policy is an ethical violation.

The story has received very little coverage, drowned out by Trump’s “shithole” comment, the government shutdown and other subjects. The changes, however, could have major ramifications for the integrity of Medicaid. If these policies are not stopped, it can be a major tool for the GOP to undermine Medicaid and weaken the US’s already markedly inadequate safety net. It would enable drastic cuts to health care on the state level, without any input from Congress. It would slowly throw people off the rolls, at least compared with Trumpcare, which would have led to 14 million Americans losing insurance within a year. And it will likely minimize national coverage, since state reforms are typically covered regionally.

Just weeks before the Medicaid announcement, the GOP passed a $1.4 trillion tax cut for the super-rich. Like the tax cut, the new Medicaid policy is strictly ideological, as the proposals are time-consuming administrative burdens that do not save money, lessen poverty or improve health outcomes.

“This is not about helping people,” said Tajah McQueen, a single mother and progressive activist in Kentucky, in an interview with Truthout. McQueen recently applied for Medicaid after losing a job. “It is based on the classist and racist assumption that all unemployed people are lazy.”

Indeed, the cuts are part of a reshaping of American social policy in the mold of the current GOP ethos. The policies follow the false logic that being poor is the result of personal failings that must be corrected — a logic that has also guided Republican efforts this past year to try and take health insurance from low-income Americans.

Not Just Work Requirements: A Toolbox of Ideological Weapons

This structural attack on Medicaid is much deeper than the initial headlines indicate. The media’s initial coverage focused narrowly on work requirements, but the policy is far more wide-reaching. “It is not just work requirements,” said Leonardo Cuello, NheLP’s director of health policy, in an interview with Truthout. Cuello cited a list of major changes to Medicaid from Kentucky’s proposal, which the state acknowledges will result in tens of thousands of newly uninsured citizens.

In addition to work requirements, Cuello said, changes in Kentucky include higher co-pays, new premiums and cuts to transportation. It would also end retroactive coverage, adding waiting lists, a health literacy course, lock-out periods for people who fail to file paperwork and force patients to collect “reward points” to get dental and vision coverage that had been part of basic coverage. All of these policies are illegal, the lawsuit contends.

While the changes are supposed to be meant for able-bodied adults, Mike Ludwig reported in Truthout that “people with disabilities in several states stand to lose their health insurance if they are unable to work.”

These are just the changes seen in Kentucky. Wisconsin is requesting urine tests. Maine wants to implement an asset test of $5,000. Arizona is trying to implement five-year lifetime caps on Medicaid. This is a particularly cruel proposal, since it would, according to the Georgetown Health Policy Center, “hurt older state residents the most,” because “anyone who lost a job during one or more recessions over the course of their adult life could exhaust their five-year limit on Medicaid coverage before they turn 65.”

The GOP’s Punitive Approach to Social Programs

To better understand the GOP’s war on Medicaid, it is helpful to look at the various philosophies that have guided this country’s social programs over the years. “Multiple philosophical roots, some more powerful than others, find expression in American social policies,” writes Ted Marmor, a Yale professor and author of Social Insurance: America’s Neglected Heritage and Contested Future.

Marmor’s book breaks social policy into several categories. The “behaviorist” view is “mainly concerned with inducing the poor to behave in more socially acceptable ways.” It’s an approach that punishes low-income Americans for the supposed moral failing of being poor, ignoring the structural roots of poverty. The behaviorist position is more popular among Republicans, but Democrats have implemented behaviorist welfare policies as well. In fact, this latest GOP move is a descendant of President Clinton’s Welfare Reform Act of 1996. At the time, the Democratic Party was in lockstep with the Democratic Leadership Council, and its pro-business policies were a big part of Clinton’s intended legacy. He pledged that the “era of big government was over,” as he spurned the working class, instead engaging with Republicans on cutting economic relief for the poor.

The 1996 law added work requirements to food and cash assistance, programs now known as Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). These reforms were driven by the view that poor people simply need to correct their behavior. It was also consistent with Clinton’s goal of ending “welfare as we know it,” in large part by adopting the consensus GOP view on social policy. The results of Clinton’s legislation were not good for low-income Americans. By 2014, according to the Center for Budget and Policy Priorities, only 23 percent of low-income Americans with children received TANF cash benefits, down from 68 percent before 1996.

But at the time, Congress and the president did not add a work mandate to the Medicaid program. “When they wrote the law, legislators made a point of separating Medicaid from food and cash assistance, so it would not be subject to work requirements,” Cuello said.

Thus far, Medicaid has not been a behaviorist program, but a residualist program. These programs are means-tested and require things like proof of income, residency, net worth, bank statements, number of dependents and so on, to prove a lack of financial resources. The program also covers some people in difficult circumstances, wards of the state, people with certain illnesses and so on.

This stands in contrast to the universal health plans in every other developed nation. These countries have social insurance programs (see graphic) that are available to everyone, whether or not they are living in poverty. Social insurance is seen as a transfer of wealth from the “fortunate to the unfortunate.” Sick people use the program whenever they need it; they pay into it with taxes.

This matrix from the book Social Insurance: America’s Neglected Heritage and Contested Future shows five different models for social programs. The new Medicaid eligibility requirements would shift the program toward the behaviorist model — popular among conservatives — which seeks to encourage “more socially acceptable behavior.”

The GOP is now trying to change Medicaid from a program that supports low-income people into a program that will punish and shame them. The policy “returns Medicaid to orthodox Republican ideas about assistance to poor people,” Marmor told Truthout. “They must be ‘deserving’ to have aid over any period of time. So, work requirements [are supposedly intended] to serve behavior change toward conventional norms as a precondition for the health care financing.”

Trump would like to see work requirements for subsidized housing as well, according to The Intercept, hoping to further grow and normalize this form of social policy across government.

Are These Cuts Legal?

Legal and health advocates say they have a strong case against work requirements for Medicaid. As noted, the Medicaid law simply does not contain any language allowing these requirements. This, legal advocates argue, means it is beyond Trump’s powers to make this policy absent an act of Congress.

“When Congress considers that work is relevant to a program, they write it in clear language,” said Cuello. “But these policies are totally contrary to the statute.”

Congress attempted to pass work requirements into law with the Cassidy-Graham version of the Trumpcare legislation. This also provides evidence, Cuello argues, that such changes are required.

There is some room in Medicaid law that permits states to use federal Medicaid funds in ways that are not otherwise allowed. But these exceptions must be “an “experimental, pilot, or demonstration project” that “is likely to assist in promoting the objectives of the program.” The administration is arguing these new requirements qualify as experimental, but opponents are not convinced.

“We know that if you make people in poverty pay premiums, many of them will not be able to pay them. This is like having a car crash into a wall at full speed and calling it an experiment on car safety,” Cuello said.

The purpose of Medicaid is to provide health care — not take it away — according to the law which created it. To get around this, Verma argues that the new provisions help the welfare of beneficiaries as employed people tend to have better health — circular logic, since people with good health have an easier time finding and keeping work. But the Trump administration insists the new policy is about providing “better mental, physical, and emotional health in furtherance of Medicaid program objectives.”

Kentucky: Ground Zero in Medicaid Battle

There is a sense of urgency to stop these policies. Kentucky plans to make the changes in July. It is possible that a judge could rule an injunction to cease the programs from being implemented while litigation is ongoing.

Kentucky Gov. Matt Bevin is one of the most prominent faces of the new assault on Medicaid. He boasted that this policy is “the biggest change to entitlements in 25 years.” He took up the mantle first, and his reforms include many horrific changes that the state admits will throw thousands off their health insurance plans. Bevin is so protective of his ownership of the policy that he issued an executive order that says he will end the Medicaid expansion should any court intervene with his new policies.

It is worth noting that Bevin himself has been late on his taxes 30 times, according to The Associated Press. If a Medicaid recipient is late on paperwork or a payment in his state, however, they can be frozen out of the program. Bevin is also accused of ethics violations, according to the Courier Journal, for “using his office for personal gain”— making his moral finger-wagging at the poor all the less credible and all the more repugnant.

Meanwhile, Medicaid recipients and applicants like Tajah McQueen are awash in uncertainty. She fears for her own fate and that of her 2-year-old daughter. “If this policy comes into play, I might not have insurance. Nothing is clear and it is really frustrating,” she said.

Medicare for All and the Case for Social Insurance

This debate — and most health care debates in the United States — would not be happening if we implemented a national health care program. Such a program would be used by everyone, without classes, work requirements or life-time caps.

The current system is a patchwork one — a problem surely not addressed by the Affordable Care Act. If there are holes for people to fall through, there will always be ways to widen them.

Until the United States adopts a model of social insurance that provides health care to all, regardless of income, the poor will continue to be treated like collateral damage in the war against equality and social justice.