UPDATE 2-U.S. judge overturns approval of Kentucky Medicaid work provisions

(Adds background on work requirements)

BOSTON/WASHINGTON, June 29 (Reuters) - A U.S. federal judge on Friday vacated the federal government's approval of new requirements by the state of Kentucky that people must work or get jobs training if they are to receive benefits from the Medicaid health insurance program.

U.S. District Judge James Boasberg in Washington, D.C., ruled that the U.S. Department of Health and Human Services never adequately considered whether the work requirements actually help the state furnish medical assistance to state residents.

"At bottom, the record shows that 95,000 people would lose Medicaid coverage, and yet the (department) paid no attention to that deprivation," Boasberg wrote.

The ruling deals a blow to the Trump administration effort to allow states to implement conservative changes to the 50-year-old Medicaid program, which provides health insurance to the poor and disabled.

The administration has approved waivers for Arkansas, Kentucky, Indiana and New Hampshire to require many residents to engage in some combination of work, volunteer, job training or school opportunities for 80 hours a month or else lose their benefits. Another eight states await federal approval for similar rules.

Kentucky Governor Matt Bevin had threatened to scrap the entire Medicaid expansion under former President Barack Obama's Affordable Care Act, which extended insurance to about 400,000 state residents, if the work requirements were overturned. He earlier signed a self-executing executive order that overturns the expansion in the event that appeals are exhausted.

Representatives for HHS and the U.S. Justice Department, which represented the federal government in the case, did not immediately respond to requests for comment.

The rules, which the state expected to begin implementing on July 1, cover people from 19 to 64 years old, exempting some groups including pregnant women, the medically frail and former foster care youth.

They were approved by Republican President Donald Trump's administration through a process that allows states to receive waivers from federal Medicaid law to test new approaches to the 50-year-old program.

A group of Kentucky residents sued in January, contending that, rather than testing a new approach, Kentucky had "effectively rewritten" the federal Medicaid law. (Reporting by Nate Raymond in Boston and Yasmeen Abutaleb in Washington Editing by Alistair Bell)