HHS leaders want states to settle the contentious question of whether Native Americans should get jobs in order to keep their health care — a move that likely won’t resolve the underlying challenge to tribal sovereignty and was sparked by an unusual split between the agency’s politically appointed administrators and legal counsel.
The agency’s position that tribes are a racial group and not separate governments — a determination by Trump administration lawyers that POLITICO first detailedlast month — has raised concerns in Congress and alarmed the tribes, who say it reverses centuries of protections enshrined in the Constitution and upheld by the Supreme Court.
HHS Secretary Alex Azar, the agency’s former general counsel, told tribal leaders at a meeting Thursday that state Medicaid administrators will be able to work with tribal governments on designing any employment requirements.
“This vision is best implemented locally, where governments know the needs of the people best,“ Azar said, according to remarks provided by HHS. “We are glad to have reached a resolution on this issue, and we’ve reminded states that they are expected to consult with the tribal governments within their borders in crafting community engagement requirements.”
The tribes had requested to be exempted from new Medicaid work rules being introduced in several states, citing their sovereign status. But the Trump administration rejected the request, saying in January it amounted to an illegal racial preference.
The rejection was driven by the HHS Office of General Counsel, which has told the tribes that its decision is based on a separate, still-undivulged lawsuit. Agency lawyers continue to believe that the tribes shouldn’t get an exemption from Medicaid work requirements, two sources with knowledge tell POLITICO.
However, the lawyers’ perspective isn’t shared by the agency’s leaders. CMS Administrator Seema Verma — who has championed Medicaid work requirements and has granted them in four states — is “fine” with giving the tribes an exemption, according to three people who have spoken with her.
Azar and other political appointees have similarly been frustrated with the HHS general counsel’s office, which is limiting the agency’s options as more than a dozen, mostly Republican-led states seek to institute Medicaid work requirements. Those states include Arizona, which initially asked for a Native American exemption but has since tweaked its proposal in light of the Trump administration’s new policy.
The state’s new idea, which is still under negotiation, would not subject the state’s Native Americans to a work requirement but is structured differently, said Liz Lorenz, assistant director for intergovernmental relations for Arizona’s Medicaid agency.
“There still needs to be an official decision. So we’re hopeful,” she said.
Mississippi has also requested a Medicaid work requirement and explicitly asked to exempt Native Americans, but two HHS officials told POLITICO that the exemption might not clear legal review.
Meanwhile, Hill Republicans have warned HHS that it’s taking the wrong approach.
“I think you’re wrong,” Sen. Jerry Moran (R-Kansas) told Azar in a congressional hearing Thursday. “I think tribes deserve the sovereignty they’re entitled to by our constitution and longstanding understanding that tribes are governmental and not racial.”
Rep. Tom Cole (R-Okla.) — a member of the Chickasaw Nation and the chairman of the House Appropriations Subcommittee that holds the purse strings for HHS — similarly has warned the agency to reverse course.
“I am concerned that both HHS and CMS are unwittingly about to kick off what may be decades of expensive and needless litigation with tribes and other parties,” Cole wrote, attaching a legal memo prepared by the Chickasaw Nation.
“There’s no way I’m ever going to support something that describes tribes as racial groups and not sovereign governments,” Cole told POLITICO. “If Republicans [with tribal expertise] don’t push back hard … I think HHS will stumble into a big fight that they don’t need.”
HHS political leaders have tried to avoid the controversy by suggesting the matter is a local issue that could be resolved as the federal government and states negotiate the parameters of their proposals.
“We look forward to working with states and tribes to try to help them achieve their goals and determine how to best apply community engagement to serve their populations,” Verma said at an American Hospital Association meeting earlier this week.
But critics argue that a state-by-state approach doesn’t get to the heart of the problem. HHS also has not issued formal written guidance revising its position.
It’s not clear how the Office of General Counsel reached its initial determination on tribal sovereignty; HHS lawyers have not divulged details to the tribes, citing ongoing litigation, but won’t specify which case. However, HHS is facing multiple lawsuits that raise relevant issues. One case involves the Rosebud Sioux Tribe, which sued the federal government over allegations that the United States violated treaties and federal obligations by failing to appropriately fund the Indian Health Service.
Another case involves Kentucky, where several advocacy groups have sued to block a work requirement slated to go into effect in July. Some CMS officials have speculated that granting an exemption for Native Americans might weaken the United States’ defense in this case.
The collision of Native American rights and entitlement reform has hemmed in some Hill Republicans, who believe that tribes should have sovereignty but also favor Medicaid work requirements. Only one Senate Republican — Alaska’s Lisa Murkowski — signed on to a Democrat-led letter warning HHS this month. Oklahoma Rep. Markwayne Mullin, who’s a member of the Cherokee tribe and chaired Trump’s Native American Coalition, has not publicly weighed in despite behind-the-scenes pressure from the tribes.
Cole said that the public health concerns and sovereignty issues are more important than Medicaid policy. “I don’t have any problem with work requirements,” the Oklahoma Republican told POLITICO. “But you don’t do things to a population that’s already underserved and has a lifespan less than the average American.”
Adam Cancryn contributed to this report.