LOUISVILLE -- A federal appeals court in Washington, D.C., will hear arguments Friday in a case to decide whether Kentucky and other states can enact sweeping changes to Medicaid that include requiring some adults to prove they are working in order to keep health coverage.

It's a key event in the ongoing battle over whether states can require low-income adults, mostly those added to Medicaid through an expansion under the Affordable Care Act, to report work or volunteer hours, pay premiums or meet other new rules.

"The Oct. 11 hearing is a huge moment," said Judith Solomon, a senior fellow on health who follows Medicaid for the Center on Budget and Policy Priorities in Washington. "This is really the bellwether for all the cases."

Kentucky was the first state to win federal approval for a Medicaid overhaul including work requirements after Donald Trump became president in 2017. But more states have similar plans in the pipeline.

Medicaid, funded largely by the federal government, provides health coverage to 75 million people nationwide and about 1.3 million adults and children in Kentucky.

The federal appeals court will decide whether the Kentucky plan proposed by Republican Gov. Matt Bevin violates federal Medicaid law, as a lower court has ruled. The panel of judges also will hear an argument from Arkansas, which along with Kentucky, had its proposal for Medicaid work requirements overturned in March by a federal judge in Washington.

It is the first such challenge to reach an appeals court and has far-reaching implications. So far, 15 other states either have won approval to enact Medicaid work requirements or are seeking permission to do so from the Trump administration, which has endorsed the idea and proposes enforcing it nationwide.

Supporters argue the changes, called "community engagement" requirements, will improve health outcomes and get more people into the workforce. Opponents say most adults on Medicaid already are employed and the complicated new rules will cause people to lose coverage and worsen their health.

Lawyers for the U.S. Justice Department and for Bevin are asking the appeals judges to reinstate Kentucky's plan. Kentucky argues that, in Bevin's words, "it is a transformative program designed not only to stabilize the (Medicaid) program financially but to improve health outcomes and overall quality of life for its members."

"We maintain that in Kentucky, we want more than to simply give someone a Medicaid card -- we want to provide a program that focuses on improving health outcomes," said Christina Dettman, spokeswoman for the state's Cabinet for Health and Family Services, which oversees Medicaid.

But a team of health law advocates argues the plans by Kentucky and Arkansas violate federal Medicaid law, which includes no provision for work requirements, and would cause tens of thousands of people to lose health coverage with no gains in employment or improved health.

By approving the plans, the Trump administration "overturned a half-century of administrative practice, ignored swaths of social science evidence and data and threatened irreparable harm to the health and welfare of tens of thousands of people," said the response from the National Health Law Program, the Kentucky Equal Justice Center, the Southern Poverty Law Center and Legal Aid of Arkansas.

Joining them in opposing the Medicaid changes in "friend of the court" briefs are more than 60 deans, professors and researchers from top medical schools and universities around the country as well as national organizations including the American Medical Association, the Catholic Health Association and the American Academy of Pediatrics.

In court filings they said the changes will lead to "mass disenrollment" in Medicaid and "dramatically worse health outcomes."

In March, U.S. District Judge James E. Boasberg, in striking down the plans of Kentucky and Arkansas, found the states had failed to failed to prove the changes would advance a central goal of Medicaid -- to ensure health coverage to the country's most vulnerable citizens.

More recently, Boasberg struck down a New Hampshire plan for Medicaid work requirements that the Trump administration had approved. Another lawsuit challenging Indiana's Medicaid work requirements was filed recently in federal court in Washington.

Critics of the Medicaid changes argue that research shows a majority of adults covered by Medicaid already work at low-wage or part-time jobs that don't offer health insurance, such as construction, housekeeping or food service.

The Kaiser Family Foundation, a nonpartisan health policy group, reports that 63% of adults covered by Medicaid work. A majority of those not employed would be exempt from the state work requirements because of disability, caregiving duties or medical conditions, it found.

A university survey led by Dr. Benjamin Sommers, a Harvard professor of health policy and economics, and published in September by the Commonwealth Fund found that 97% of Kentucky adults covered by Medicaid already meet the proposed requirements by activities such as working or job training or because they would qualify for an exemption.

"These results indicate there may be relatively few Medicaid beneficiaries who might be compelled to work by the new policy," it said.

A decision by the three-judge panel will be an important step toward resolving the legal dispute. But it likely won't be the final word, with most observers predicting the U.S. Supreme Court will make the final call.

"I assume whoever loses will take it there," Solomon said.

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