Opinion ID: 4507755
Heading Depth: 2
Heading Rank: 1

Heading: Objective of Medicaid

Text: The district court is indisputably correct that the principal objective of Medicaid is providing health care coverage. The Secretary’s discretion in approving or denying demonstrations is guided by the statutory directive that the demonstration must be “likely to assist in promoting the objectives” of Medicaid. 42 U.S.C. § 1315. While the Medicaid statute does not have a standalone purpose section like some social welfare statutes, see, e.g., 42 U.S.C. § 601(a) (articulating the purposes of the Temporary Assistance for Needy Families program); 42 U.S.C. § 629 (announcing the “objectives” of the Promoting Safe and Stable Families program), it does have a provision that articulates the reasons underlying the appropriations of funds, 42 U.S.C. § 1396-1. The provision describes the purpose of Medicaid as to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care. 11 Id. In addition to the appropriations provision, the statute defines “medical assistance” as “payment of part or all of the cost of the following care and services or the care and services themselves.” 42 U.S.C. § 1396d(a). Further, as the district court explained, the Affordable Care Act’s expansion of health care coverage to a larger group of Americans is consistent with Medicaid’s general purpose of furnishing health care coverage. See Stewart I, 313 F. Supp. 3d at 260 (citing Pub. L. No. 111-148, 124 Stat. 119, 130, 271 (2010)). The text consistently focuses on providing access to health care coverage. Both the First and Sixth Circuits relied on Medicaid’s appropriations provision quoted above in concluding that “[t]he primary purpose of Medicaid is to enable states to provide medical services to those whose ‘income and resources are insufficient to meet the costs of necessary medical services.’” Pharm. Research & Mfrs. of Am. v. Concannon, 249 F.3d 66, 75 (1st Cir. 2001) (quoting 42 U.S.C. § 1396 (2000)), aff’d, 538 U.S. 644 (2003); Price v. Medicaid Dir., 838 F.3d 739, 742 (6th Cir. 2016). Similarly, the Ninth Circuit relied on both the appropriations provision and the definition of “medical assistance” when describing Medicaid as “a federal grant program that encourages states to provide certain medical services” and identifying a key element of “medical assistance” as the spending of federally provided funds for medical coverage. Univ. of Wash. Med. Ctr. v. Sebelius, 634 F.3d 1029, 1031, 1034–35 (9th Cir. 2011). Beyond relying on the text of the statute, other courts have consistently described Medicaid’s objective as primarily providing health care coverage. For example, the Third Circuit succinctly stated, “We recognize, of course, that the primary purpose of medicaid is to achieve the praiseworthy 12 social objective of granting health care coverage to those who cannot afford it.” W. Va. Univ. Hosps., Inc. v. Casey, 885 F.2d 11, 20 (3d Cir. 1989), aff’d, 499 U.S. 83 (1991). Likewise, the Supreme Court characterized Medicaid as a “program . . . [that] provides joint federal and state funding of medical care for individuals who cannot afford to pay their own medical costs.” Ark. Dep’t of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 275 (2006); see also Virginia ex rel. Hunter Labs., L.L.C. v. Virginia, 828 F.3d 281, 283 (4th Cir. 2016) (quoting Ahlborn in the section of the decision explaining the important aspects of Medicaid). The statute and the case law demonstrate that the primary objective of Medicaid is to provide access to medical care. There might be secondary benefits that the government was hoping to incentivize, such as healthier outcomes for beneficiaries or more engagement in their health care, but the “means [Congress] has deemed appropriate” is providing health care coverage. MCI Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218, 231 n.4 (1994). In sum, “the intent of Congress is clear” that Medicaid’s objective is to provide health care coverage, and, as a result, the Secretary “must give effect to [that] unambiguously expressed intent of Congress.” Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984). Instead of analyzing whether the demonstration would promote the objective of providing coverage, the Secretary identified three alternative objectives: “whether the demonstration as amended was likely to assist in improving health outcomes; whether it would address behavioral and social factors that influence health outcomes; and whether it would incentivize beneficiaries to engage in their own health care and achieve better health outcomes.” Ark. AR 4. These three alternative objectives all point to better health outcomes 13 as the objective of Medicaid, but that alternative objective lacks textual support. Indeed, the statute makes no mention of that objective. While furnishing health care coverage and better health outcomes may be connected goals, the text specifically addresses only coverage. 42 U.S.C. § 1396-1. The Supreme Court and this court have consistently reminded agencies that they are “bound, not only by the ultimate purposes Congress has selected, but by the means it has deemed appropriate, and prescribed, for the pursuit of those purposes.” MCI Telecomms., 512 U.S. at 231 n. 4; see also Waterkeeper All. v. EPA, 853 F.3d 527, 535 (D.C. Cir. 2017); Colo. River Indian Tribes v. Nat’l Indian Gaming Comm’n, 466 F.3d 134, 139– 40 (D.C. Cir. 2006). The means that Congress selected to achieve the objectives of Medicaid was to provide health care coverage to populations that otherwise could not afford it. To an extent, Arkansas and the government characterize the Secretary’s approval letter as also identifying transitioning beneficiaries away from governmental benefits through financial independence or commercial coverage as an objective promoted by Arkansas Works. Ark. Br. 14, 37–42; Gov’t Br. 24–25, 32. This argument misrepresents the Secretary’s letter. The approval letter has a specific section for the Secretary’s determination that the project will assist in promoting the objectives of Medicaid. Ark. AR 3–5. The objectives articulated in that section are the health-outcome goals quoted above. That section does not mention transitioning beneficiaries away from benefits. The district court’s discussion of the Secretary’s objectives confirms our interpretation of this letter. It identifies the Secretary’s alternative objective as “improv[ing] health outcomes.” Gresham, 363 F. Supp. 3d at 179. There is no reference to commercial coverage in the Secretary’s approval letter, and 14 the only reference to beneficiary financial independence is in the section summarizing public comments. In response to concerns about the community engagement requirements creating barriers to coverage, the Secretary stated, “Given that employment is positively correlated with health outcomes, it furthers the purposes of the Medicaid statute to test and evaluate these requirements as a means to improve beneficiaries’ health and to promote beneficiary independence.” Ark. AR 6. But “[n]owhere in the Secretary’s approval letter does he justify his decision based . . . on a belief that the project will help Medicaid-eligible persons to gain sufficient financial resources to be able to purchase private insurance.” Gresham, 363 F. Supp. 3d at 180–81. We will not accept post hoc rationalizations for the Secretary’s decision. See State Farm, 463 U.S. at 50. Nor could the Secretary have rested his decision on the objective of transitioning beneficiaries away from government benefits through either financial independence or commercial coverage. When Congress wants to pursue additional objectives within a social welfare program, it says so in the text. For example, the purpose section of TANF explicitly includes “end[ing] the dependence of needy parents on government benefits by promoting job preparation, work, and marriage” among the objectives of the statute. 42 U.S.C. § 601(a)(2). Also, both TANF and the Supplemental Nutrition Assistance Program (SNAP) condition eligibility for benefits upon completing a certain number of hours of work per week to support the objective of “end[ing] dependence of needy parents on government benefits.” 42 U.S.C. §§ 601(a)(2), 607(c) (TANF); 7 U.S.C. § 2015(d)(1) (SNAP). In contrast, Congress has not conditioned the receipt of Medicaid benefits on fulfilling work requirements or taking steps to end receipt of governmental benefits. 15 The reference to independence in the appropriations provision and the cross reference to TANF cannot support the Secretary’s alternative objective either. The reference to “independence” in the appropriations provision is in the context of assisting beneficiaries in achieving functional independence through rehabilitative and other services, not financial independence from government welfare programs. 42 U.S.C. § 1396-1. Medicaid also grants states the “[o]ption” to terminate Medicaid benefits when a beneficiary who receives both Medicaid and TANF fails to comply with TANF’s work requirements. See 42 U.S.C. § 1396u-1(b)(3)(A). The provision gives states, therefore, the ability to coordinate benefits for recipients receiving both TANF and Medicaid. It does not go so far as to incorporate TANF work requirements and additional objectives into Medicaid. Further, the history of Congress’s amendments to social welfare programs supports the conclusion that Congress did not intend 42 U.S.C. § 1396u-1(b)(3)(A) to incorporate TANF’s objectives and work requirements into Medicaid. In 1996, SNAP already included work requirements to maintain eligibility. 7 U.S.C. § 2015(d)(1) (1994). Also in 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act, which replaced Aid to Families with Dependent Children with TANF and added work requirements. Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. No. 104-193, sec. 103, § 407, 110 Stat. 2105, 2129–34. At the same time, it added 42 U.S.C. § 1396u-1(b)(3)(A) to Medicaid. Id. at sec. 114, § 1931, 110 Stat. at 2177–80. The fact that Congress did not similarly amend Medicaid to add a work requirement for all recipients—at a time when the other two major welfare programs had those requirements and Congress was in the process of amending welfare statutes—demonstrates that 16 Congress did not intend to incorporate work requirements into Medicaid through § 1396u-1(b)(3)(A). In short, we agree with the district court that the alternative objectives of better health outcomes and beneficiary independence are not consistent with Medicaid. The text of the statute includes one primary purpose, which is providing health care coverage without any restriction geared to healthy outcomes, financial independence or transition to commercial coverage.