Stewart v. Azar

In 2010, Congress enacted the Patient Protection and Affordable Care Act (ACA), a comprehensive plan to provide universal health coverage. Prior to the ACA’s enactment, Medicaid covered only certain needy populations, like the blind and disabled. The ACA allowed states to expand their Medicaid coverage to all nonelderly who fell below a specified income level. Kentucky expanded its coverage. Thereafter, Kentucky asked the secretary (defendant) of Health and Human Services (department) to approve a demonstration project. One component of that project, known as Kentucky HEALTH (program), primarily targeted the expansion population. Among other things, the program imposed community-engagement requirements on continued Medicaid eligibility. Kentucky estimated that the program would remove 95,000 people from the state’s Medicaid rolls in five years. The secretary was statutorily authorized to approve a state demonstration project if the secretary found that the project was likely to promote Medicaid’s objectives. Once a project was approved, the secretary could waive certain Medicaid requirements to the extent and for the time necessary to carry out the project. The secretary approved Kentucky’s program and granted waivers to implement certain program features, including the community-engagement requirement. In so doing, the secretary did not consider whether the program would impede or promote medical coverage. Rather, the secretary purported to approve the program because it would further public health, save money, and promote self-sufficiency among recipients. Several Kentucky Medicaid recipients, including Ronnie Stewart (collectively, Stewart) (plaintiffs), challenged the secretary’s approval of the program. Specifically, Stewart argued that the secretary acted arbitrarily and capriciously in approving the program because the secretary did not adequately consider the program’s impact on Kentucky’s ability to furnish medical assistance.