A federal district court judge in Connecticut ruled this week that the Biden administration must stop the enforcement of a Trump-era rule that terminated Medicaid benefits for some enrollees on the health program for low-income and disabled individuals.
Judge Michael Shea issued a nationwide preliminary injunction that the U.S. Department of Health and Human Services must inform state agencies by Feb. 7 not to comply with an interim final rule (IFR) from November 2020 that kicked certain enrollees off of Medicaid and to reinstate the policy that kept people covered during the COVID-19 public health emergency.
The injunctive relief is in place until March 31 since provisions protecting against the termination of coverage under a federal pandemic law end at that time. Starting on April 1, states will begin a year-long process called “unwinding” to review who is eligible to remain on Medicaid.
“While it is true that each state has its own eligibility requirements governing its Medicaid plan, all members of the revised class were moved out of their existing coverage to a [Medicare Savings Plan] for a common reason — the IFR,” Shea wrote in his ruling. “Thus, a determination that the IFR is unlawful, as the Plaintiffs contend, would, in a single stroke, likely return all class members to the level of benefits they enjoyed between March 18, 2020, and Nov 6, 2020.”
The case originally stemmed from a lawsuit in August filed by three Connecticut women in the U.S. District Court in Connecticut against HHS Sec. Xavier Becerra asking him to invalidate the rule. Two additional plaintiffs from other states later joined the suit, and in November, a different federal district judge in Hartford — Omar Williams — granted relief to the five named plaintiffs.
The named plaintiffs, however, represent just a few of the thousands around the country who have lost Medicaid benefits during the pandemic. The case eventually became a nationwide class action lawsuit, though the judge narrowed the class to people enrolled in Medicaid in any state on or after March 18, 2020, who had reductions to their benefits and either had or would become eligible for a Medicare Savings Program.
The plaintiffs’ attorneys argued that the rule violated the “Families First Coronavirus Response Act,” a law passed by Congress in March 2020. It stipulated that states receiving enhanced federal Medicaid funds cannot terminate or reduce a person’s benefits through the end of the month when the public health emergency ends, even if that person is no longer eligible. If they maintain that coverage, state Medicaid agencies receive an extra 6.2% in reimbursements. The exceptions are if an enrollee moves out of state or voluntarily disenrolled from the coverage.
But a rule implemented eight months later by the Trump administration created exemptions and mandated that states receiving the funds must cut certain people from the rolls: those who are also enrolled in a Medicare Savings Program and non-citizens who have lived in the U.S. for less than five years unless they are a minor or pregnant.
Lawyers and disability advocates worried about the reductions and terminations of coverage that they say disproportionately hurt people of color who need access to programs like Medicaid, which is known as HUSKY in Connecticut.
“Any loss of Medicaid benefits disproportionately impacts low-income older and disabled adults of color, who are already most at risk of institutionalization and illness due to structural inequities,” Carol Wong, associate litigation director of Justice in Aging and one of the plaintiff attorneys, said in a statement.
Once HHS informs states by next Tuesday about the new guidance, the next steps are unclear and could vary depending on the state. There is no exact timing for how quickly those who lost coverage could be reinstated. And there is no guarantee that they will get retroactive benefits that back date to the time of termination. But past guidance from the Centers for Medicare and Medicaid Services, which is part of HSS, indicate that both are possible.
“At a minimum, states are expected to inform individuals whose coverage was terminated after March 18, 2020, of their continued eligibility and encourage them to contact the state to reenroll,” according to CMS guidance related to the continuous enrollment requirement in the pandemic law. “Where feasible, states should automatically reinstate coverage for individuals terminated after March 18, 2020, and should suspend any terminations already scheduled to occur during the emergency period. Coverage should be reinstated back to the date of termination.”
The plaintiff’s attorneys argued that Trump’s HHS violated the Administrative Procedures Act in its implementation of the regulation and that enforcement by the Biden administration is continuing to cause “irreparable harm.”
Lawyers for the defendant argued against certifying the nationwide class and did not believe that such harm would be caused because plaintiffs did not demonstrate that all or most people “will forgo medical care” without relief from the court.
They also argued that ending the 2020 rule could prompt states to pass on the enhanced Medicaid funding instead of reinstating coverage. But the judge considered that to be speculative and noted that the defendant said CMS did not know of a state willing to do that.
The judge ultimately certified the class under a narrower scope and agreed with the plaintiffs in his ruling that irreparable harm would be caused if there is “a denial of needed health care” because of the 2020 rule.
Sheldon Toubman, an attorney working with Disability Rights CT, said there were more than 11,000 people in Connecticut who saw Medicaid cuts as of August and there are likely several thousand more seeing reductions since then.
The initial plaintiffs, who are all residents of Connecticut with severe health complications, lost their Medicaid coverage when they became eligible for the Medicare Savings Program. Since filing the lawsuit, two of the three named plaintiffs — Brenda Moore and Deborah Carr — were able to temporarily keep their benefits since they requested a temporary mandatory restraining order for immediate relief.
Moore, a New Haven resident who has a vascular disease and other health problems, said her aide helps her with everything from getting out of bed, getting dressed and preparing meals. Without the assistance from Medicaid, Moore said she would not be able to keep receiving care from her aide.
“It’s vital to disabled people that we get this help. They cut off people like us who don’t get a lot of money a month and have other bills to pay and try to make sure to pay for an aide on our own. We can’t because it doesn’t cover it,” Moore said back in August.
While those affected by the interim final rule should get their benefits restored, they are only guaranteed until the end of March when Medicaid coverage will start getting reassessed.
But Toubman said it is likely those recipients will continue to get coverage for at least a few more months and possibly for another year as Connecticut and states go through the unwinding process. Under the government funding package Congress passed last year, the law ends the requirement of continuous Medicaid enrollment as the national public health emergency is set to end in May.
States like Connecticut can take 12 to 14 months to complete it.
Millions of Medicaid recipients are at risk of losing coverage since the number ballooned during the pandemic and kept people on the plan even if they were no longer eligible because of changes to their income or family.
CMS is recommending that states use the full window starting on April 1 to review all enrollees and make redeterminations of their Medicaid. During this time, states will not lose their enhanced funding to keep people on the rolls until the end of the year. This timeline is supposed to prevent quick terminations of coverage as well as losses in funding for states.
Connecticut detailed its plan last summer for how to phase out the pandemic-era Medicaid requirement and return to regular operations. According to the state Department of Social Services, over 970,000 people were enrolled in full HUSKY coverage as of May 31, 2022.
The agency said it “will employ a 12-month staggered renewal schedule using primarily an age-based approach.”
The Connecticut Mirror/Connecticut Public Radio federal policy reporter position is made possible, in part, by funding from the Robert and Margaret Patricelli Family Foundation and Engage CT.