Five things to know about Medicaid work requirements

Five things to know about Medicaid work requirements
© Greg Nash

The Trump administration released landmark guidance this week aimed at allowing states to impose work requirements for Medicaid beneficiaries, a major shift in the design of the health insurance program for the poor and disabled. 

Here are five things to know about work requirements.

No state has ever done it before.

Requiring work for benefits is a GOP policy staple, but until this week, no state has ever been able to get federal approval to impose work requirements on Medicaid beneficiaries.

ObamaCare allowed states to expand Medicaid coverage to people earning up to 138 percent of the federal poverty level. While the Obama administration was willing to be fairly flexible in what policies they allowed in expansion states, so long as the state ended up expanding coverage, they drew the line at work requirements.

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Policy experts and advocates say the idea that poor people are taking advantage of the Medicaid system is a false characterization of the state-federal health program for the needy.

From some of the earliest days of the administration, Trump administration officials signaled they were open to states imposing work requirements for “able-bodied” people on Medicaid. But it wasn’t until this week that it became official policy.

On Friday, Kentucky became the first state to receive approval from the Trump administration to impose work requirements as part of a broader overhaul of the state’s Medicaid program.

There are going to be lawsuits.

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

Under federal law, the Centers for Medicare and Medicaid Services (CMS) needs to consider if a waiver is “likely to assist in promoting the objectives” of Medicaid. 

The Obama administration interpreted that to mean ensuring that people had insurance coverage, but the Trump administration clearly has a different interpretation.

Lawyers for advocacy groups are likely to argue that work requirements don’t promote the objectives of the Medicaid program because they would be a barrier to coverage. 

The administration has a lot of flexibility in how it defines the objectives of the program, though. If they can show a correlation between work and improved health outcomes, they could have a strong argument. 

Asked on Friday if he anticipates legal challenges, Kentucky Gov. Matt Bevin (R) did not sound concerned.

“It's conceivable,” Bevin said. “We live in America. There are a lot of lawsuits that fly around this town, this country. People certainly have that right. We'll see. It's up to people to decide.”

Not everyone will be required to work.

CMS officials emphasized that the work requirements would only apply to “able-bodied” adults, coming with exemptions for children, the elderly, pregnant women and people with disabilities. 

Kentucky’s program also exempts "medically frail" individuals, such as people with cancer, blood-clotting disorders, or alcohol or substance abuse disorders.

Kentucky state officials made it clear that the work requirements were aimed squarely at the newly eligible Medicaid enrollees, who gained coverage only after the state’s previous Democratic governor expanded Medicaid.

Bevin said many of the newly eligible are able-bodied, and said they had a moral responsibility to work for their benefits. 

CMS left it up to states to decide what sort of “work” they would require, so each state is likely to have different requirements.

Kentucky, for example, will require able-bodied adults to complete 80 hours a month of community engagement to qualify for coverage. The engagement could include work, education, community service or job training.

People will lose coverage. 

CMS Administrator Seema Verma said she hopes the work requirements will improve enrollees’ health while reducing Medicaid rolls. 

Verma said requiring people to work would encourage them to find jobs that offer health coverage or make enough money to afford private plans, she said.

In Kentucky, officials estimated up to 95,000 people would no longer have Medicaid at the end of the five-year demonstration. State officials emphasized to reporters that while they do expect some people to lose coverage, those people would only represent a fraction of the number of people leaving the rolls.

Most of the low enrollment projections reflect those who would transition off of Medicaid because they enter the workforce, get a better job and higher wages and gain access to employer-sponsored insurance or other private insurance, they said. 

Red states are most interested.

Nine states have already applied for Medicaid waivers that include work requirements. Kentucky’s waiver took well over a year to be approved, but experts predict that others will now be approved quickly.

The other states who have applied for waivers are Arizona, Arkansas, Indiana, Kansas, Maine, New Hampshire, North Carolina, Utah and Wisconsin, all but one of which has a Republican governor. 

In Kentucky, Bevin said he wouldn’t be surprised if other states used Kentucky’s Medicaid program as a model, although CMS officials said the Kentucky approval was not meant to be a template.

In a surprising turn, Louisiana Gov. John Bel Edwards (D) said the state is "actively working" on a proposal to send to the federal government that would impose work requirements.

But blue states likely have no interest in forcing Medicaid recipients to work for their benefits. For example, Washington Gov. Jay Inslee (D) on Friday said the state is helping Medicaid enrollees find jobs in other ways, like job coaching, employer relations and helping with job placement.

“We do not want to pursue a strategy that could take away health care from people. What we are doing is providing targeted supports that will help qualified Apple Health clients to maintain housing and jobs — and ultimately self-sufficiency," the state's Health Care Authority Director Sue Birch said in a statement.