A federal appeals court struck down the Trump-approval Medicaid work requirements in Arkansas, serving the latest legal setback for the administration's healthcare agenda.

The U.S. Court of Appeals for the D.C. Circuit’s three-judge panel ruled unanimously Friday to uphold a lower court's ruling that the administration’s attempt to implement Medicaid work requirements in Arkansas was illegal.

“Failure to consider whether the project will result in coverage loss is arbitrary and capricious,” Judge David Sentelle, a Reagan appointee, wrote in the panel’s opinion.

The panel also noted that when the program called Arkansas Works, which was in effect for just five months before being blocked in the court, about 18,000 Medicaid beneficiaries lost coverage .

Judge James Boasberg, an Obama appointee to the U.S. District Court for the District of Columbia, first struck down Arkansas’s work requirement program as well as Kentucky’s work requirement program in March 2019, followed by New Hampshire’s work requirement program in July.

In his March ruling to block Arkansas’s work requirement, Boasberg said the Trump administration should have considered whether the approved rules "would be likely to cause recipients to lose coverage and whether it would cause others to gain coverage," adding that secretary for the Department of Health and Human Services, Alex Azar, did neither.

Critics of work requirements, which mandate that in order to receive Medicaid coverage, residents must work for a certain number of hours, volunteer, or be enrolled in school, say the program kicks people off their healthcare coverage.