Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud
Speaker 1: and on Bloomberg dot com slash podcasts. Kentucky became the
Speaker 1: first state to win approval from the Trump administration to
Speaker 1: require some Medicaid beneficiaries to work or pursue jobs, the
Speaker 1: first work mandate for Medicaid. Twelve days later, advocacy groups
Speaker 1: file the first lawsuit to stop Kentucky's changes, alleging the
Speaker 1: administration's efforts to overhaul Medicaid are illegal and go beyond
Speaker 1: the president's authority. A lot of first said, in light
Speaker 1: of the fact that ten other states have asked Washington
Speaker 1: to let them make similar changes, the implications of this
Speaker 1: first legal class are significant. My guest is Sydney Watson,
Speaker 1: Professor at St. Louis University School of Law. Sydney, please
Speaker 1: describe Kentucky's changes to Medicaid um well. Governor Blooden's was
Speaker 1: elected on a platform to repeal the Medicaid expansion, and
Speaker 1: when that didn't seem to be politically possible he shifted
Speaker 1: to requesting this waiver, and the waiver really dramatically changes
Speaker 1: Medicaid for the people who got coverage through the Affordable
Speaker 1: Care Act Medicaid expansion for low income, working working adults.
Speaker 1: It would impose work requirements. It imposes high premiums even
Speaker 1: for those who were without any income. It includes laws
Speaker 1: of coverage and lockout for six months for failure to
Speaker 1: file paperwork, and it cuts a lot of critical services
Speaker 1: like transportation to and from medical services. It's a real
Speaker 1: transformation of Medicaid. It creates tremendous barriers to care. And
Speaker 1: it's estimated that about of these working age adults who
Speaker 1: now have Medicaid coverage in Kentucky would lose coverage over
Speaker 1: five years. What are the claims in the lawsuit challenging
Speaker 1: Kentucky's waiver UM. It's a series of claims. Some of
Speaker 1: them are based on the Administrative Procedure Act that the
Speaker 1: waiver approval itself was an abusive discretion and not in
Speaker 1: accordance with law UM. There are other claims that it
Speaker 1: violates provisions of the Medicaid Act and the Social Security Act,
Speaker 1: and there's also a constitutional claim that it violates to
Speaker 1: take care clause that requires the President and the executive
Speaker 1: branch too, and I quote take care that the laws
Speaker 1: be faithfully executed. It's a constitutional claim that the Trump
Speaker 1: administration is explicitly and willfully trying to undermine the Affordable
Speaker 1: Care Act, trying to undermine the purposes of Medicaid through
Speaker 1: approving this waiver. Now, the administration has not responded to
Speaker 1: this lawsuit yet, but there's been so much talk about
Speaker 1: this Medicaid waiver. What are likely to be some of
Speaker 1: the legal responses to the lawsuit. Well, of course, the government,
Speaker 1: you know, has time to file their complaint and then
Speaker 1: we'll we'll see the briefing. I think one of the
Speaker 1: key issues is going to be the agency's authority to
Speaker 1: impose this work requirement, to impose these premiums UH, to
Speaker 1: impose these paperwork requirements UM. And those claims turn partly
Speaker 1: on language in the Medicaid Act, but also language about
Speaker 1: Section eleven fifteen waivers, which are a way for states
Speaker 1: to have additional flexibility and Medicaid to implement one experimental
Speaker 1: programs to that promote the objectives of the Medicaid Act.
Speaker 1: And I think what we're going to hear a lot
Speaker 1: about is whether these new provisions promote the objectives of
Speaker 1: the Medicaid Act. Um. The plaintiffs statement is that the
Speaker 1: purposes of the Medicaid Act is to provide health insurance
Speaker 1: and health coverage. UM. The vision of Kentucky and of
Speaker 1: CMS is that Medicaid has suddenly become a program for work,
Speaker 1: to promote work, to force work. Now, something that I
Speaker 1: found a little odd is that the governor, Matt Bevans
Speaker 1: signed an executive order directing state officials to strip Medicaid
Speaker 1: coverage from nearly half a million Kentuckians if a court
Speaker 1: strikes down any portion of Kentucky's waiver application. So if
Speaker 1: the court says his action is illegal, he'll pull healthcare
Speaker 1: coverage from residents of his state. Is that a not
Speaker 1: so veiled threat to connect those two? I think you're
Speaker 1: absolutely correct. It's very interesting political posturing that the threat
Speaker 1: is if you sew me, I'm going to take away
Speaker 1: these benefits. And can he do that? Um? I don't know.
Speaker 1: I mean what was interesting is he did run his
Speaker 1: gubernatorial campaign saying he was going to repeal this Affordable
Speaker 1: Care Act expansion. Once he was in office, I think
Speaker 1: he realized there were political consequences to that, and that
Speaker 1: you know, and for many Kentuckians is a crucial way
Speaker 1: to get healthcare coverage. And instead of going through with
Speaker 1: that threat, we see the waiver. So I don't know.
Speaker 1: I think it's public and political posturing. We'll see what
Speaker 1: happens as the lawsuit goes forward. Will this case have
Speaker 1: any impact beyond Kentucky? Oh? Absolutely. As you mentioned earlier,
Speaker 1: ten other states have in requests for waivers um that
Speaker 1: include work requirements. Many of them also include these high
Speaker 1: premiums and other um, other barriers to care. Uh. So
Speaker 1: this is I think a fundamental legal issue as we
Speaker 1: move into the second year of the Trump administration of
Speaker 1: what the Constitutional Administrative Procedure Act and statutory parameters that
Speaker 1: define the Medicaid program um, And does c ms and
Speaker 1: states have the authority to create these barriers to care?
Speaker 1: Is this in some way asking courts to decide the
Speaker 1: philosophical divide between conservatives and liberals over medicaid or is
Speaker 1: it strictly based on the statutes? Um. I think this
Speaker 1: is both a constitutional challenge and a statutory challenge, but
Speaker 1: very much this is a legal challenge um, rather than
Speaker 1: merely a political challenge. UM. The Medicaid Act was passed
Speaker 1: in nineteen sixty five, and many of the provisions in
Speaker 1: the Act make it different from traditional private insurance. Medicaid
Speaker 1: is a safety net program for the poorest Americans and
Speaker 1: it's structured in a way to meet their needs. UM
Speaker 1: And over the last fifty years, while medicators had rocky
Speaker 1: moments and been underfunded at times by states, it has
Speaker 1: really helped promote health and help care follow income populations.
Speaker 1: And I think the fundamental statutory constitutional issue here is
Speaker 1: does the agency do states have the authority to flaunt
Speaker 1: that protection and create a program that is really designed
Speaker 1: to set up a sense a wall of baarrier between
Speaker 1: people and that health insurance program. Sydney, about thirty seconds
Speaker 1: left here. Who has the better side of the argument
Speaker 1: in your view? UM always seen as the complaints so far,
Speaker 1: I don't think anyone who follows Medicaid was surprised that
Speaker 1: this complaint was going to be filed. There's been a
Speaker 1: lot of talk about these legal theories. We'll see what
Speaker 1: happens with the briefings. Thank you for being here. That's
Speaker 1: Sydney Wattson. She's a professor at St. Louis University's School
Speaker 1: of Law. A Brazilian appeals court unanimously upheld a graph
Speaker 1: sentence against former president Louis and Nacio Lula da Silva
Speaker 1: and added two and a half years to his jail sentence.
Speaker 1: Hours later, Lula accepted his party's nomination as its presidential candidate.
Speaker 1: In an act of defiance, his lawyers vowed to take
Speaker 1: the case to brazil Supreme Court. Learning me from Brazilia
Speaker 1: is rae call it Bloomberg News Brazilian Bureau chief ray.
Speaker 1: What did the appeals court find? Well, essentially, they said
Speaker 1: that contrary to what Lula's defense lawyers said, that this
Speaker 1: was all fabricated, that it was a you know, a
Speaker 1: political move, the poem out of the race. There, they
Speaker 1: said that essentially there was sufficient evidence to conclude that
Speaker 1: Lula not only participated in the scheme, he helped UH
Speaker 1: forge it, if you will, by appointing um key personnel
Speaker 1: and staff to um State companies, who then walked away
Speaker 1: with millions of dollars in there and their pockets. And
Speaker 1: he also personally benefited, They argued, he received a beach
Speaker 1: side apartment, or really at least an upgrade to it.
Speaker 1: UM in exchange for favors for for a construction company.
Speaker 1: And of course the verdict was three to zero, which
Speaker 1: left little doubt that Lula Lula's defence lawyers were hoping
Speaker 1: for split vote, which would have given them more more
Speaker 1: chance for an appeal. But but there it is, and
Speaker 1: and and that's the that's the final verdict. He's been
Speaker 1: leading the polls for October's presidential election and since the
Speaker 1: conviction his poll numbers improved a little. Can you explain
Speaker 1: the loyalty he inspires despite the charges and the conviction. Yes, absolutely,
Speaker 1: he's somewhere north of thirty three is the voter intention
Speaker 1: that he has in in the polls. Lula is one
Speaker 1: of those historic figures. I mean, he's he's larger than life.
Speaker 1: He's he's pulled millions of people out of poverty. He's
Speaker 1: probably the first first president that comes from UM, from
Speaker 1: a rather humble background UM. And people don't don't forget that.
Speaker 1: And of course we have to remember that when he
Speaker 1: was in off As, those were the boom days. That's
Speaker 1: where you know that the commodity boom was going on.
Speaker 1: Brazilva's exporting soybeans, iron ore, all sorts of things, and
Speaker 1: things were going well, um, and so there's a bit
Speaker 1: of reminiscing going on as well. Well, if we had
Speaker 1: Lula back, things would be good again. Um. But let's
Speaker 1: not forget there are more people who don't want him
Speaker 1: president than there are people who do. Um. So that's
Speaker 1: something to to bear in mind. Not everybody wants him back.
Speaker 1: The Silva still has several avenues of appeal. Is there
Speaker 1: likely to be a lot months of uncertainty ahead of
Speaker 1: the vote. That's absolutely right. It's gonna be a long
Speaker 1: legal battle, um, finding legal loopholes, and unfortunately that's the
Speaker 1: worst scenario for investors, for citizens, especially if they're very damaging.
Speaker 1: Epis shout of years of crisis, of doubts of our
Speaker 1: democracy the people that actually want dictatorship back has has
Speaker 1: gone up. And that's the worrying part. You know, people
Speaker 1: want a clean, fair election. The lasting Brazil needs right
Speaker 1: now is doubts over who can run, why this person
Speaker 1: can or cannot run. Hopefully all that will be settled
Speaker 1: before the election in October seven. And I've read some
Speaker 1: politicians saying that if he is not in the election,
Speaker 1: there will be those kinds of doubts about it. Well again,
Speaker 1: I mean that's what they're alleging, that this is a
Speaker 1: political move to pull him out of the race. We
Speaker 1: do have to keep in mind he's not the only
Speaker 1: one being sentenced. As a matter of fact, this whole
Speaker 1: car wash operation that's been going on for for years
Speaker 1: has put dozens of people behind bars from different political parties.
Speaker 1: Lula is not the only one. And the same court
Speaker 1: that upheld his conviction yesterday has up up pulled more
Speaker 1: than two dozen similar convictions. So I think that puts
Speaker 1: it a bit into into into perspective that this perhaps
Speaker 1: isn't quite the political persecution that Lula would would have
Speaker 1: it be. He's seventy two years old. Why did the
Speaker 1: court add two and a half years to his jail
Speaker 1: sentence to make a ten Well, look, I'm afraid, my my,
Speaker 1: my legal expertise there comes to an end. They simply
Speaker 1: looked at the facts and if he found guilty of
Speaker 1: certain charges, then they you know, got out the calculator
Speaker 1: and find you know, found that that that that that
Speaker 1: deserved more than twelve years. But I think the psychological
Speaker 1: impact of that is just that it was all the
Speaker 1: more of a blow. You know, they wanted him to
Speaker 1: you know, uh, they split vote at least maybe get
Speaker 1: him off the hook. But no, on the contrary, it
Speaker 1: got worse. So, you know, a big blow for Lulah
Speaker 1: that day. And what are the I know you're not
Speaker 1: legal expert on this, but are there are people saying
Speaker 1: that they has a chance on appeal? Um, the chances
Speaker 1: very small. I mean, frankly, there's a there's a law
Speaker 1: in Brazil that clearly states anybody who's been convicted UM
Speaker 1: in an appeals court, criminally convicted, cannot run. So they're
Speaker 1: going to the motion. They're gonna look for all legal loopholes,
Speaker 1: but frankly, the chances are small. There is a law. Um.
Speaker 1: What what needs to happen is that justice needs to
Speaker 1: be done quickly. Again, as I said, so the Brazilians
Speaker 1: can have a fear fair and clean election. When I
Speaker 1: was reading about the amount of security yesterday around the courthouse,
Speaker 1: it was really it's sort of was like a something
Speaker 1: that you see in a movie because it was just
Speaker 1: so overpowering. Describe what what the setup was like, Yes,
Speaker 1: particularly for for Brazilian standards, there were sharpshooters on the roof.
Speaker 1: There were even Navy patrol ships on a river that's
Speaker 1: ports in the southern The southern city is close to
Speaker 1: the ocean, but this was a river. The navy patrol ships.
Speaker 1: They closed down part of the the airspace above the courthouse,
Speaker 1: so quite quite you know, tight security measures, um, which
Speaker 1: are a bit unusual for for Brazil. I think the
Speaker 1: concern was because tens of thousands of supporters of Lula
Speaker 1: were busted into the city. UM that the conditions for
Speaker 1: safe trial we're not given. Hence the the extra security measures.
Speaker 1: And it's not entirely I mean, we had a couple
Speaker 1: of months ago last year, um, the agriculture ministry here
Speaker 1: in Brazilia was set on fire, for example, during during
Speaker 1: a protest. UM. So I think they were just trying
Speaker 1: to be on the safe side and ensure that you know,
Speaker 1: violence and interruption of this trial would have would have
Speaker 1: been worse yet than than any sort of outcome. UM.
Speaker 1: So I think it was part of the wise thing
Speaker 1: to do, all right, And thank you so much for
Speaker 1: being here. Ray, that's Ray College. He's a Bloomberg News
Speaker 1: Brazilian bureau chie. Thanks for listening to the Bloomberg Law podcast.
Speaker 1: As you can subscribe and listen to the show on
Speaker 1: Apple Podcasts, SoundCloud, and on Bloomberg dot com slash podcast.
Speaker 1: I'm June Brosso. This is Bloomberg h