Arkansas Gov. Asa Hutchinson is prepared to sign a bill that would replace the state’s long-fought-over Medicaid work requirements program with one that doesn’t require work but incentivizes it. This comes as the Supreme Court announced it will continue to hold the pending court case on the legality of work requirements.

The bill Arkansas’ statehouse passed and sent to Hutchinson’s desk late last month would give Medicaid enrollees the option to sign up for a work or education incentive program in exchange for enrollment in private marketplace plans. The state would still need to request a waiver from the Biden administration to implement the program.

Hutchinson has told U.S. News he intends to sign the legislation and submit a waiver to the administration. However, the state is still unwilling to let go of its ongoing legal battle to obtain the authority to implement a full work requirements program.

“We will continue to pursue legal authority for a work requirement at the US Supreme Court level and by a possible appeal from the recent (Department of Health and Human Services) denial,” Hutchinson said in an emailed statement.

The states’ work requirements program, which was the first such one implemented in the country, went into effect in 2018 but was blocked by a judge in early 2019. The policy required enrollees to log a certain number of hours working a job or attending school, with some exceptions, including for those deemed medically frail. Those who failed to log their hours after a certain number of months risked being rolled out of insurance. Approximately 18,000 people lost Medicaid insurance coverage while the policy was being implemented; many regained their coverage when the policy was paused.

Arkansas’ work requirements policy wasn’t the only one to face legal challenges; several other states, which had received waivers to implement the policy, have had their programs blocked in court. No programs are currently being implemented, as an early COVID-19 relief package blocked states from changing or raising eligibility requirements for their Medicaid programs during the public health emergency.

But in February, the Biden administration told all states with requirements that it would begin the process of withdrawing these waivers.

“CMS has preliminarily determined that allowing work and other community engagement requirements to take effect in Arkansas would not promote the objectives of the Medicaid program,” Centers for Medicare & Medicaid Services Acting Administrator Elizabeth Richter wrote to Arkansas in February.

In March, Richter wrote again, notifying Arkansas, as well as New Hampshire, that CMS was withdrawing their waivers. In April, Richter notified Wisconsin and Michigan that their waivers would be withdrawn, as well.

However, Dawn Stehle, Arkansas’ Medicaid director, has told the Biden administration that the state needs more time to conduct data matches on the 18,000 people who lost coverage during the work requirements period to determine whether those losses could be attributed to the policy.

“A 90-day period to respond to the federal government’s inquiry will assist Arkansas in ensuring the Administration has access to the most pertinent information before it makes a decision with such long-lasting impacts on the nature of federal-state cooperation in Medicaid demonstration projects. Indeed, absent this additional time, any review will ultimately rest on incomplete data,” Stehle wrote in a letter to the administration.

“Our attorneys advise that without sufficient time to properly respond, any corresponding decision by CMS would be arbitrary, capricious, and otherwise not in accordance with the law,” Stehle added.

This letter comes as the Supreme Court considers an appeal by Arkansas and New Hampshire to re-implement their programs blocked by federal judges. The Biden administration has asked the high court to nix the case, and in March, the court scrapped opening arguments. However, on Monday, in a short notice, the court said it was holding the case “in abeyance,” or holding the case pending a further court order.

MaryBeth Musumeci, associate director of the program on Medicaid and the uninsured at the Kaiser Family Foundation, wrote on Twitter that it’s possible the court has reached a decision on the future of the cases “but is waiting to allow time for another Justice to write a dissent.”

Eliot Fishman, senior director of health policy at consumer advocacy group Families USA, says he thinks Arkansas asking for more time is an attempt to create doubt in the Biden administration’s argument for the reversal of the work requirements policies.

“Even if (the Supreme Court) doesn’t allow them to implement work requirements in 2021 or 2022, they still would like the ability to implement work requirements next time if there’s an administration that supports them,” Fishman says.

Fishman adds it remains to be seen what the high court ends up doing with the case.

“The Supreme Court has never really weighed in on Medicaid waivers,” he notes, but he says canceling oral arguments shows the court is likely seriously considering dropping the case.

Meanwhile, the state’s planned Medicaid overhaul, called the Arkansas Health and Opportunity Program for Me, would allow Medicaid recipients in the state’s expansion population to opt into a work or education program with set monthly premiums and cost-sharing plans, per the bill’s text, in exchange for enrollment in private marketplace plans. Per the bill, Medicaid enrollees who do not wish to take part in the program would receive traditional Medicaid coverage. There is no penalty for failing to log hours.

The overhaul also leaves the door open for a required work requirements program. It includes a provision stating that the governor would request federal permission for such a program should “federal law or regulations change to allow the approval of a waiver for this purpose.”