Two federal court rulings issued last month in long-running legal sagas underscore the inherently malleable legal boundary lines for the interpretation, enforcement, and evasion of Obamacare’s overreaching edicts.
In the southern district of Georgia, a federal district court judge found that the Biden administration’s efforts to rescind a previously-approved Medicaid waiver for the state of Georgia involving work requirements were arbitrary and capricious. Its order of vacatur restores the state’s ability to proceed with the waiver, (at least until the next stage of this continuing ping pong match).
In the Fifth Circuit Court of Appeals, a three-judge panel upheld the primary rulings of an earlier federal district court in Texas that had overturned an advisory opinion by the Department of Labor (DOL) concerning a proposed single-employer Employee Retirement Income Security Act (ERISA) health plan. The panel remanded the case back to the trial court for further analysis, but it agreed that DOL had been arbitrary and capricious in its earlier disposition of the issue at the administrative level.
These types of cases can be tediously complex and difficult to summarize quickly, but let’s try to do it in several parts (due to space limits). We start with the Georgia waiver one today. First the basic parameters, and in Part II what they really reveal about how sausage making can get off track in the modern administrative state.
In October 2020, the Trump administration’s Centers for Medicare and Medicaid Services (CMS) approved the Georgia Pathways Medicaid demonstration project. It was premised on expanding Medicaid coverage for low-income Georgians not previously eligible for Medicaid in that state, conditioned on the new enrollees engaging in sufficient qualifying activities (mostly work or education) and paying small monthly premiums. Georgia was one of the remaining states still holding out on approving the “evolving” terms of Medicaid expansion under the 2010 Affordable Care Act (ACA).
By the fall of 2020, a number of Republican-led state governments that had received earlier approval of somewhat different Medicaid work-requirement waivers by the Trump administration already had run into serious legal problems in federal courts. Those efforts had either been abandoned or paused while further legal appeals to the Supreme Court (involving Arkansas and New Hampshire) continued into early 2021. However, the new Biden administration decided to terminate all of the approved waivers (including the latest one for Georgia) through executive branch action. Its CMS officials first signaled to various states that it was reconsidering the previous Trump CMS approvals of their waivers. By February 2021, Biden CMS issued letters rescinding most of them, as well as a last-minute Trump supplemental agreement in January 2021 with several states aimed at adding further legal protections against early termination of such waivers. Formally terminating the key work requirement and premium payment components of the newer Georgia Pathways waiver took a little longer procedurally, until late December 2021.
The Biden administration’s legal strategy in its early months included seeking an indefinite delay in oral argument in the Supreme Court cases (scheduled for late March 2021), along with an order remanding the issues back to the HHS Secretary and vacating the lower court rulings. The Supreme Court initially granted an indefinite delay, but in April 2022, it ordered that the issues were moot and the previous appellate rulings should be remanded and vacated.
Absent those precedents, as well as any Supreme Court ruling on the merits, this opened the door to Georgia’s new lawsuit against the Biden CMS, filed in late January 2022, asserting that rescinding approval for the demonstration waiver was unlawful for a number of reasons.
On August 19, 2022, federal district court judge Lisa Godbey Wood ruled that the CMS rescission of the Georgia Pathways demonstration waiver was unlawful. She found that the decision fell short of “reasoned decision making,” and it was arbitrary and capricious on numerous, independent grounds.
For the moment, Georgia can resume its implementation of the Medicaid demonstration as approved back in October 2020. Its efforts to contest a different CMS partial rescission of another “Georgia Access Model” waiver granted under section 1332 of the ACA also will be reinvigorated. In part II, we will examine why the Biden administration’s legal strategies fell short and what this may imply for similar probes of legal boundary lines for ACA-related waivers in the near future.
The post A Tale of Two Legal Tangles Part I: Why It’s Hard to Keep Every ACA Exit Door Locked appeared first on American Enterprise Institute – AEI.