About the author: Nicholas Bagley is a law professor at the University of Michigan.
As President Joe Biden takes office, his administration will get to work reversing some of the Trump administration’s most controversial and destructive policies, including the elimination of key environmental protections, the creation of new immigration restrictions, and the sabotage of the Affordable Care Act.
After the Georgia runoffs, it’s tempting to think that a Democratic Congress could just legislate these policies away. But the Senate filibuster is likely to remain intact for now, effectively giving Republicans a veto over legislative efforts to undo President Donald Trump’s regulatory legacy.
Nor can President Biden reverse the damage just by signing a fat stack of executive orders. Instead, the law requires federal agencies to follow certain procedures—many quite persnickety—when they make changes to government policy. And reversing Trump-era policy will be all the more difficult because that administration used its remaining days in office to create additional procedural obstacles to insulate its decisions from reversal.
The Biden administration will therefore have to balance a desire for speed against the need to protect its actions from court challenges. The threat of judicial review looms especially large because President Trump has stacked the courts with zealous conservatives who view the administrative state with suspicion and who are unlikely to take a charitable view of the new administration’s actions.
That will put a premium on good and creative lawyering. How can federal agencies move quickly while minding their p’s and q’s?
There’s no single answer to that question; instead, much will depend on the specific legal rules that apply to different types of policies. Some will be easy to reverse—President Biden can rejoin the Paris climate accords without much fuss. Others will be harder—undoing the rollback of habitat protections for threatened species under the Endangered Species Act, for example, may require a cumbersome notice-and-comment process.
Nowhere will the trade-off between speed and procedural regularity be posed more starkly than in the context of Medicaid work requirements. Addressing them will be an early test of the Biden administration’s nimbleness and competence.
On the long list of the Trump administration’s bad policies, allowing the states to impose work requirements on Medicaid recipients ranks high. Such requirements serve no good purpose: Data show that they don’t serve their ostensible goal of increasing employment. All they do is create onerous paperwork and strip poor people, potentially 4 million of them, of their health insurance.
Still, 19 Republican-controlled states asked the Trump administration to waive parts of the Medicaid statute to allow them to impose work requirements. The Trump administration has so far granted eight such waivers, but, for now, federal courts in Washington, D.C., have ruled that they’re illegal. The courts’ reasoning is simple: By law, a Medicaid waiver has to advance the program’s core objective, which is providing health coverage. Taking insurance away from people doesn’t advance that objective; it’s inimical to it.
The courts’ opinions are strong and well reasoned. Last month, however, the Supreme Court agreed to hear two cases about the validity of work requirements in Arkansas and New Hampshire. It’s possible—even likely, as I’ve written elsewhere—that work requirements may get a sympathetic hearing from the conservative justices. If so, the waivers could spring back into effect—in the midst of a global pandemic, no less.
A decision upholding work requirements would also set a dangerous precedent. Absent Supreme Court intervention, as Ian Millhiser noted at Vox, “a future Republican administration would likely have to spend months or even years litigating the question of whether work requirements are permitted.” But if the Supreme Court blesses the requirements, Republicans could quickly move to impose them the next time they win the White House.
So the race is on for the Biden administration to withdraw the waivers before the Supreme Court issues its decision, probably sometime in May or June.
Easier said than done. By regulation, the secretary of the Department of Health and Human Services—Xavier Becerra, if he’s confirmed—can withdraw waivers when he concludes that they no longer advance Medicaid’s purposes. In doing so, however, HHS has to abide by certain procedures it agreed to follow when it granted the waivers.
Until two weeks ago, those procedures were modest. The agency would have had only to give objecting states “a hearing to challenge” the withdrawal before it took effect. In practice, that afforded HHS lots of flexibility. Some hearings are elaborate, formal, and in person—think here of a criminal proceeding. Others are brief, casual, and on paper—the process you might use, for example, to challenge a parking ticket.
To eliminate work requirements, the agency could have held expedited, stripped-down hearings, ones that gave the states a chance to make their case, but that didn’t bog the agency down in a procedural morass. If HHS sprinted, it could have finished its hearings before the Supreme Court acted. At that point, the work-requirement cases would have been dismissed as moot, much as the Court, in a case last term, dismissed as moot a challenge to a New York gun law that had since been repealed.
On January 4, however, the Trump administration announced that it was changing the rules. In a seemingly innocuous letter to state Medicaid directors, the director of the Centers for Medicare and Medicaid Services, Seema Verma, offered “additional details of the process” for withdrawing waivers. One of those new details is that no withdrawal can take effect for at least nine months.
The change is a brazen, cynical attempt to protect work requirements long enough for the Supreme Court to rule on them. And while it’s dastardly, it’s also clever. When the states agree to the terms of Verma’s letter—and Republican-controlled states certainly will, if they haven’t already—its terms arguably become enforceable as a kind of intergovernmental contract. I say “arguably” because the letter itself may be legally defective, as two Democratic congressional leaders have already argued in an angry missive to Verma. But the possibility that the courts might treat it as binding means that it’d be risky for the Biden team to withdraw the waivers before nine months are up.
The Biden administration still has options, however—and here’s where the creative lawyering comes in. Among the states that have sought to impose work requirements, Michigan is really unusual. The state’s governor, Gretchen Whitmer, is a Democrat who has been vocal about her distaste for work requirements. She has stuck with them only because, under the prior Republican governor, the Republican-controlled legislature passed a law requiring her to keep them in place. (From March to August 2020, I served as special counsel to Whitmer on her COVID-19 response.)
Whitmer doesn’t want to make it harder for Biden to undo work requirements, which is why Michigan won’t be keen to sign Verma’s letter. Without Michigan’s signature, the old rules allowing for an expedited paper hearing would still apply in the state. And a quick hearing for Michigan would give the Biden administration leverage to put the Supreme Court case on hold while the other states’ waivers were withdrawn.
Here’s how it might work. Shortly after Biden takes office, his HHS could announce that it will be withdrawing all the work-requirement waivers. Most of the withdrawals would take effect nine months later, per Verma’s letter, but Michigan’s would take effect much sooner—say, on May 1.
Moving on an expedited timeline, the agency would develop an exhaustive and carefully considered explanation for the withdrawals. To anticipate red-state objections, the explanation would make two things abundantly clear: first, that the agency has reconsidered its legal position about the compatibility of work requirements with the Medicaid statute, and second, that the agency no longer interprets the available evidence to suggest that such requirements can reasonably be expected to make people healthier.
Once Michigan’s waiver was withdrawn, the remaining waivers would be doomed. The Justice Department would then have a compelling reason to ask the Supreme Court to dismiss the pending cases involving Arkansas and New Hampshire—or at least delay ruling on them. There’s no need for the Court to resolve difficult, controversial cases that will become moot within months.
The department could also argue, with real force, that the outgoing administration shouldn’t be allowed to manipulate procedural rules in order to manufacture a basis for a Court decision. Doing so would be especially anomalous given that work requirements are operationally complex and depend on extensive outreach to Medicaid beneficiaries. Even if the Court approved work requirements in the early summer, neither Arkansas nor New Hampshire would have enough time to impose them before the withdrawal of their waivers became effective in the fall.
Will this approach work? Maybe. The Supreme Court could still plow ahead with the cases on the technical ground that the Arkansas and New Hampshire waivers would be valid for a few months more. And counting on the forbearance of the conservative supermajority might be dicey. Still, the strategy is both straightforward and plausible.
Now that Democrats have taken the Senate, however, a second potential avenue for getting rid of work requirements may have opened in Congress, even if the filibuster remains intact.
The Congressional Review Act is an obscure law that allows a bare majority of the legislature to repeal Trump-era rules enacted within the administration’s last two months—so-called midnight rules. Matthew Lawrence, a law professor at Emory University, has argued that Congress might be able to characterize the work-requirement waivers as “rules” and invoke the law to rescind them.
Though Lawrence doesn’t go this far, waivers that were adopted several years ago might even be subject to the Congressional Review Act on the theory that they were never submitted to Congress for its consideration. (In 2018, the Republican-controlled Congress exploited that loophole when it eliminated a 2013 automobile-pricing guidance document from the Consumer Financial Protection Bureau.)
Using the act would have two key advantages: First, Congress’s decision wouldn’t be subject to court review. Second, HHS would be prohibited from reissuing waivers that are “substantially the same” as the Trump-era waivers. Work requirements might be off the table forever.
This legal strategy, though clever, is far from airtight. Using the Congressional Review Act might require Congress to get a positive legal opinion from the Government Accountability Office, which may not agree that waivers count as “rules” and, in any event, is unlikely to move quickly. In addition, the act is a somewhat blunt tool. Simply canceling waivers that are bound up in broader state Medicaid programs may create more problems than it solves. A more surgical, agency-led response would likely be preferable.
Whatever the Biden administration chooses to do, the broader point is that even the simple act of rescinding waivers is hard. Remaking policy in other domains will be harder still. That’s why undoing what the Trump administration has done can’t happen overnight. It will take years of patient work, overseen by lawyers who marry close attention to detail with the urgency that the times demand.
It won’t be easy. But it’ll be worth it.