Trump poised to take action on Medicaid work requirements

The Trump administration is preparing to release guidelines soon for requiring Medicaid recipients to work, according to sources familiar with the plans, a major shift in the 50-year-old program.

The guidelines will set the conditions for allowing states to add work requirements to their Medicaid programs for the first time, putting a conservative twist on the health insurance program for the poor.

Democrats are gearing up for a fight, likely including lawsuits, arguing the administration is trying to undermine ObamaCare’s Medicaid expansion on its own after Congress failed to repeal the health-care law.

The changes represent the vision of Seema Verma, the administrator of the Centers for Medicare and Medicaid Services (CMS), who has long worked on conservative Medicaid changes.

In a speech in November hinting at the coming changes, Verma criticized ObamaCare for expanding Medicaid to “able-bodied” adults and said that group of people should be expected to work.

“Believing that community engagement requirements do not support or promote the objectives of Medicaid is a tragic example of the soft bigotry of low expectations consistently espoused by the prior administration,” Verma said. “Those days are over.”

The work requirements would only take effect if a state chose to pursue them and applied for a waiver from the federal government. The Obama administration always rejected state applications that included work requirements, but the new guidelines from the Trump administration would set conditions where those applications would be approved for the first time.

There are currently nine states applying to impose work requirements.

Democrats argue the changes would result in people losing health coverage if they cannot meet the new requirements or simply if the new bureaucratic hurdles discourage people from enrolling. They say many Medicaid enrollees already work, and those that don’t often can’t because they are disabled or caring for family members or other reasons.

“If they put out guidance, that would be a watershed moment I think,” said Hannah Katch, senior policy analyst at the left-leaning Center for Budget and Policy Priorities. It would be a “fundamental change in the way that people are covered by Medicaid,” she added.

“States know better than the federal government how to address the unique needs of their people,” a CMS spokesperson wrote in an email Thursday. “That is why we support innovative efforts at the state level to enhance the lives of Medicaid recipients and help them achieve self-sufficiency.”

The details of the guidance remain unclear, but it will allow states to have work requirements approved if they meet certain conditions, sources say. The release is expected within weeks, though the exact timing is unclear.

Eliot Fishman, who was a top Medicaid official under President Obama until last January, said that he expects the guidance to be issued “imminently,” though he said he has heard it is coming soon for two months.

“The hold-up is the Administration’s correct concern that waiver approvals will be challenged legally,” Fishman wrote in an email.

Liberal groups are preparing to sue the administration over the changes, arguing that work requirements are not allowed under current law and would require congressional action. Waivers must promote the “objectives” of Medicaid to be approved under the law, and Democrats argue a change that could cause people to lose coverage fails that standard.

“The guidance is an attempt to put the administration’s preferred legal framing around the waiver approvals, in anticipation of likely legal challenge in the federal courts,” Fishman, who now works for Families USA, a liberal advocacy group, wrote in the email. “Given that the legal standard is whether the waivers ‘promote the objectives’ of the Medicaid program, that the basic objective of the program is to cover low-income people, and that these waivers will take coverage away from low-income people, they will have a tough legal case to make.”

In addition to the guidance, the administration could also announce the approvals of the work requirement applications from some states, either at the same time or shortly after.

Many experts expect Kentucky will be the first state approved.

Other states have proposed additional conservative changes to Medicaid beyond work requirements. Wisconsin, for example, is applying to require drug testing of Medicaid recipients.

Of the 9.8 million non-elderly Medicaid enrollees not working in 2016, 36 percent said illness or disability was their main reason for not working, according to the Kaiser Family Foundation. Thirty percent said they were caring for a family member, while 15 percent said they were going to school.

Experts at the Georgetown Center for Children and Families say that a significant number of people would lose coverage if a state imposed work requirements, in part simply due to red tape.

The center points out that Kentucky’s own estimates say 100,000 fewer people would have coverage by the fifth year of its proposal.

Verma, though, argues that working helps improve people’s lives.

“For people living with disabilities, CMS has long believed that meaningful work is essential to their economic self-sufficiency, self-esteem, well-being and improving their health,” she said in the November speech. “Why would we not believe that the same is true for working age, able-bodied Medicaid enrollees?”