For a second time in nine months, the same federal judge has struck down the Trump administration’s plan to force some Medicaid recipients to work to maintain benefits.

The ruling Wednesday by U.S. District Judge James Boasberg blocks Kentucky from implementing the work requirements and Arkansas from continuing its program. More than 18,000 Arkansas enrollees have lost Medicaid coverage since the state began the mandate last summer.

Boasberg said that the approval of work requirements by the Department of Health and Human Services “is arbitrary and capricious because it did not address … how the project would implicate the ‘core’ objective of Medicaid: the provision of medical coverage to the needy.”

The decision could have repercussions nationally. The Trump administration has approved a total of eight states for work requirements, and seven more states are pending.

Still, health experts say it’s likely the decision won’t stop the administration or conservative states from moving forward. Many predict the issue will ultimately be decided by the Supreme Court.

Kentucky Gov. Matt Bevin, a Republican, has threatened to scrap the Medicaid expansion unless his state is allowed to proceed with the new rules; if he follows through with that threat, more than 400,000 new enrollees would lose their health coverage. He said the work requirement would help move some adults off the program so the state has enough money to help other enrollees.

Bevin, who is running for re-election this fall, had threatened to end the Medicaid expansion during his last campaign but backed off that pledge after his victory.

Arkansas officials have not said what they plan to do.

In his decision on Kentucky, Boasberg criticized HHS officials for approving the state’s second effort to institute work requirements partly because Bevin threatened to end the Medicaid expansion without it.

Under this reasoning, the judge said, states could threaten to end their expansion or do away with Medicaid “if the Secretary does not approve whatever waiver of whatever Medicaid requirements they wish to obtain. The Secretary could then always approve those waivers, no matter how few people remain on Medicaid thereafter because any waiver would be coverage-promoting, compared to a world in which the state offers no coverage at all.”

The decision by federal officials in 2018 to link work or other activities such as schooling or caregiving to eligibility for benefits is a historic change for Medicaid, which is designed to provide safety-net care for low-income individuals.

Top Trump administration officials have promoted work requirements, saying they incentivize beneficiaries to lead healthier lives. Democrats and advocates for the poor decry the effort as a way to curtail enrollment in the state-federal health insurance entitlement program that covers 72 million Americans.

Despite the full-court press by conservatives, most Medicaid enrollees already work, are seeking work or go to school or care for a loved one, studies show.

Critics of the work policy hailed the latest ruling, which many expected since Boasberg last June stopped Kentucky from moving ahead with an earlier plan for work requirements. The judge then also blasted HHS Secretary Alex Azar for failing to adequately consider the effects the policy.

“This is a historic decision and a major victory for Medicaid beneficiaries,” said Joan Alker, executive director for the Georgetown University Center for Children and Families. “The message to other states considering work requirements is clear — they are not compatible with the objectives of the Medicaid program.”

Sally Pipes, president of the conservative San Francisco-based Pacific Research Institute, called the ruling “a major blow” to the Trump administration but said this won’t end its efforts.

“The Department of Health and Human Services is very committed to work requirements under Medicaid,” Pipes said.

“It is my feeling that those who are on Medicaid who are capable of working should be required to work, volunteer, or take classes to help them become qualified to work,” she added. “Then there will be more funding available for those who truly need the program and less pressure on state budgets.”

Several states, including Virginia and Kentucky, have used the prospect of work rules to build support among conservatives to support Medicaid expansion, which was one of the key provisions of the Affordable Care Act. That expansion has added more than 15 million adults to the program since 2014.

Previously the program mainly covered children, parents and the disabled.

Particularly irksome to advocates for the poor: Some states, including Alabama, which didn’t expand Medicaid, are seeking work requirements in the traditional Medicaid program for parents who have incomes as low as $4,000 a year.

The legal battle centers on two issues — whether the requirements are permissible under the Medicaid program and whether the administration overstepped its authority on allowing states to test new ways of operating the program.

Alker said that state requests for Medicare waivers in the past have involved experiments that would expand coverage or make the program more efficient. The work requirements mark the first time a waiver explicitly let states reduce the number of people covered by the program.

States such as Kentucky have predicted its new work requirement would lead to tens of thousands of enrollees losing Medicaid benefits, though states argued some of them would get coverage from new jobs.

Under the work requirements — which vary among the states in terms of what age groups are exempt and how many hours are required — enrollees generally have to prove they have a job, go to school or are volunteers. There are exceptions for people who are ill or taking care of a family member.

In Arkansas, thousands of adults failed to tell the state their work status for three consecutive months, which led to disenrollment. For the first several months last year, Arkansas allowed Medicaid recipients to report their work hours only online. Advocates for the poor said the state’s website was confusing to navigate, particularly for people with limited computer skills.

While the administration said it wanted to test the work requirements, none of the states that have been cleared to begin have a plan to track whether enrollees find jobs or improve their health — the key goals of the program, according to a story in the Los Angeles Times.

Craig Wilson, director of health policy at the Arkansas Center for Health Improvement, a nonpartisan health research group, said he believes policymakers will appeal court rulings all the way to the Supreme Court.

“As long as they hold on to hope that some judge will rule in their favor, states will continue to pursue work requirements,” Wilson said.

Kaiser Health News is a nonprofit news service and editorially independent program of the Kaiser Family Foundation. KHN is not affiliated with Kaiser Permanente.

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Three times a week, 66-year-old Tod Gervich injects himself with Copaxone, a prescription drug that can reduce the frequency of relapses in people who have some forms of multiple sclerosis. After living with the disease for more than 20 years, the self-employed certified financial planner in Mashpee, Mass., is accustomed to managing his condition. What he can’t get used to is how Medicare’s coinsurance charges put a strain on his wallet.

Unlike commercial plans that cap members’ out-of-pocket drug spending annually, Medicare has no limit for prescription medications in Part D, its drug benefit. With the cost of specialty drugs increasing, some Medicare beneficiaries could owe thousands of dollars in out-of-pocket drug costs every year for a single drug.

Recent proposals by the Trump administration and Sen. Ron Wyden, D-Ore., would address the long-standing problem by imposing a spending cap. But it’s unclear whether any of these proposals will gain a foothold.

The 2006 introduction of the Medicare prescription drug benefit was a boon for seniors, but the coverage had weak spots. One was the so-called doughnut hole — the gap beneficiaries fell into after they accumulated a few thousand dollars in drug expenses and were then on the hook for the full cost of their medications. Another was the lack of an annual cap on drug spending.

Legislative changes have gradually closed the doughnut hole so that this year beneficiaries no longer face a coverage gap. In a standard Medicare drug plan, beneficiaries pay 25 percent of the price of their brand-name drugs until they reach $5,100 in out-of-pocket costs. Once patients reach that threshold, the catastrophic portion of their coverage kicks in, and their obligation drops to 5 percent. But it never disappears.

It’s that ongoing 5 percent that hits hard for people, like Gervich, who take expensive medications.

His 40-milligram dose of Copaxone costs about $75,000 annually, according to the National Multiple Sclerosis Society. In January, Gervich paid $1,800 for the drug, and he paid another $900 in February. Discounts that drug manufacturers are required to provide to Part D enrollees also counted toward his out-of-pocket costs. (More on that later.) By March, he had hit the $5,100 threshold that pushed him into catastrophic coverage. For the rest of the year, he’ll owe $295 a month for this drug, until the cycle starts over again in January.

That $295 is a far cry from the approximately $6,250 monthly Copaxone price without insurance. But, combined with the $2,700 he had already paid before his catastrophic coverage kicked in, the additional $2,950 he’ll owe this year is no small amount. And that assumes he needs no other medications.

“I feel like I’m being punished financially for having a chronic disease,” he says. He has considered discontinuing Copaxone to save money.

His drug bill is one reason Gervich has decided not to retire yet, he says, adding that an annual cap on his out-of-pocket costs “would definitely help.”

Drugs like Copaxone that can modify the effects of the disease have been on a steep upward price trajectory in recent years, says Bari Talente, executive vice president for advocacy at the National Multiple Sclerosis Society. Drugs that five years ago cost $60,000 annually now cost $90,000, she says. With those totals, Medicare beneficiaries “are going to hit catastrophic coverage no matter what.”

Specialty-tier drugs for multiple sclerosis, cancer and other conditions — defined by Medicare as those that cost more than $670 a month — account for more than 20 percent of total spending in Part D plans, up from about 6 percent before 2010, according to a report by the Medicare Payment Advisory Commission, a nonpartisan agency that advises Congress about the program.

Just over 1 million Medicare beneficiaries in Part D plans who did not receive low-income subsidies had drug costs that pushed them into catastrophic coverage in 2015 — more than twice the 2007 total — according to an analysis by the Kaiser Family Foundation.

“When the drug benefit was created, 5 percent probably didn’t seem like that big a deal,” says Juliette Cubanski, associate director of the Program on Medicare Policy at the Kaiser Family Foundation. “Now we have such expensive medications, and many of them are covered under Part D — where, before, many expensive drugs were cancer drugs” that were administered in doctors’ offices and covered by other parts of Medicare.

The lack of a spending limit for the Medicare drug benefit sets it apart from other coverage. Under the Affordable Care Act, the maximum amount someone generally owes out-of-pocket for covered drugs and other medical care for this year is $7,900. Plans typically pay 100 percent of customers’ costs after that.

The Medicare program doesn’t have an out-of-pocket spending limit for Part A or Part B, which cover hospital and outpatient services, respectively. But beneficiaries can buy supplemental Medigap plans, some of which pay coinsurance amounts and set out-of-pocket spending limits. Medigap plans, however, don’t cover Part D prescription plans.

Counterbalancing the administration’s proposal to impose a spending cap on prescription drugs is another proposal that could increase many beneficiaries’ out-of-pocket drug costs.

Currently, brand-name drugs that enrollees receive are discounted by 70 percent by manufacturers when Medicare beneficiaries have accumulated at least $3,820 in drug costs and until they reach $5,100 in out-of-pocket costs. Those discounts are applied toward beneficiaries’ total out-of-pocket costs, moving them more quickly toward catastrophic coverage.

Under the administration’s proposal, manufacturer discounts would no longer be treated this way. The administration says this would help steer patients toward less expensive generic medications.

Still, beneficiaries would have to pay more out-of-pocket to reach the catastrophic spending threshold. Thus, fewer people would likely reach the catastrophic coverage level at which they could benefit from a spending cap.

“Our concern is that some people will be paying more out-of-pocket to get to the $5,100 threshold and the drug cap,” says Keysha Brooks-Coley, vice president of federal affairs at the American Cancer Society Cancer Action Network.

“It’s kind of a mixed bag,” says Cubanski of the proposed calculation change. “There will be savings for some individuals” who reach the catastrophic phase of coverage. “But for many, there will be higher costs.”

For some people, especially cancer patients taking chemotherapy pills, the lack of a drug-spending cap in Part D coverage can seem especially unjust.

These cutting-edge, targeted oral chemotherapy and other drugs tend to be expensive, and Medicare beneficiaries often hit the catastrophic threshold quickly, says Brooks-Coley.

Patty Armstrong-Bolle, a Medicare patient who lives in Haslett, Mich., takes Ibrance, a pill, once a day to help keep in check the breast cancer that has spread to other parts of her body. While the medicine has helped send her cancer into remission, she may never be free of a financial obligation for the pricey drug.

Armstrong-Bolle paid $2,200 for the drug in January and February of last year. When she entered the catastrophic coverage portion of her Part D plan, the cost dropped to $584 per month. Armstrong-Bolle’s husband died last year, and she used the money from his life insurance policy to cover her drug bills.

This year, a patient assistance program has covered the first few months of coinsurance. That money will run out next month, and she’ll owe her $584 portion again.

If she were getting traditional drug infusions instead of taking an oral medication, her treatment would be covered under Part B of the program, and her coinsurance payments could be covered.

“It just doesn’t seem fair,” she says.

Kaiser Health News, a nonprofit news service, is an editorially independent program of the Kaiser Family Foundation. Neither KHN nor KFF is affiliated with Kaiser Permanente. Michelle Andrews is on Twitter: @mandrews110.

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