To reform Medicaid and welfare, think beyond only work waivers

To reform Medicaid and welfare, think beyond only work waivers
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New state flexibility is coming in Medicaid, the federal state health care program for low-income Americans. The Centers for Medicare and Medicaid Services (CMS) is giving states the opportunity to conduct demonstration projects to integrate work and other “community engagement” requirements as a condition of participation for certain enrollees.

The pilot program opportunities come at a time when many states, especially those who expanded their programs as a result of ObamaCare, are struggling to cope with the growing demands on their Medicaid programs. This new guidance from the CMS outlines broad parameters within which states may consider adding these new requirements.

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Some states, for example, have expressed an interest in requiring certain recipients to perform some type of work activity in exchange for benefits. The CMS guidelines would allow this, but take care to note that such an approach cannot be taken with certain types of recipients, such as disabled individuals.

The guidelines stress the need for states to consider proper protections for other groups and recommend that states consider a range of activities that would qualify as meeting the work requirements. The CMS further suggests that, where appropriate, states consider aligning any Medicaid work requirements with those that apply to other state welfare programs.

No Medicaid program is alike. Different states will take different approaches, and these approaches will produce different outcomes. Ultimately, these demonstrations should better inform future action, including statutory action, taken by policymakers. This month, Kentucky received the first waiver issued under this guidance. Several other states have proposed integrating work and community engagement into their Medicaid programs and others are likely to follow.

Pilot programs are a good way to test new policy ideas. Applying new ideas in a practical setting helps identify real world challenges and allows them to be evaluated for real world effectiveness. But pilot programs need not, indeed, must not supplant efforts by Congress to pursue more meaningful statutory changes in Medicaid. Nor do they in any way diminish the need to strengthen existing work requirements in cash assistance welfare programs.

If we are to help needy families achieve self-sufficiency, restoring meaningful work requirements in traditional cash assistance programs is critically important. Specifically, work requirements in the Temporary Assistance to Needy Families Program should be strengthened and extended to other welfare programs, including food stamps. This will require congressional action.

As for Medicaid, the program faces many serious challenges. Demographic, structural and fiscal issues put the future of the program — and taxpayers — at risk. Originally, Medicaid was created to serve the nation’s most vulnerable individuals such as the disabled, elderly and pregnant women and children in poverty. Today, as a result of ObamaCare, some state programs have added able-bodied individuals without dependents to their programs.

The rapid expansion of the program, with or without ObamaCare expansions, means greater demand for care and services across a diverse group of people. Waivers offer some flexibility to the states, but even waivers have limitations. As Medicaid continues to grow, the program and its finite resources will be further stretched and the program will be further weakened.

Fundamental reforms are essential. Congressional actions are needed, including putting Medicaid on a budget, better integrating private health insurance options into the program, and giving beneficiaries meaningful choices in, and control over, decisions regarding their own health care.

Letting states experiment with integrating work requirements into their Medicaid programs will help determine if the positive results the approach produced in other welfare programs can be replicated in Medicaid. However, these demonstration projects should not distract Congress from strengthening work requirements in federal cash assistance programs and tackling the bigger policy issues facing the Medicaid program.

Nina Owcharenko Schaefer is a senior research fellow in the Center for Health Policy Studies at The Heritage Foundation. She previously served as senior counselor to the secretary of the U.S. Department of Health and Human Services in the Trump administration.