The Trump administration this morning released guidance for states that wish to impose work requirements on nondisabled, working-age adults in their Medicaid programs.
The administration has long signaled that it would be encouraging of states that wished to pursue Medicaid work requirements, which the Obama administration did not allow. Governor Hutchinson submitted a request for a waiver of Medicaid rules that included a request for work requirements last summer. Arkansas is one of ten states currently seeking such waivers for work requirements. (Update: see a statement from the governor at the bottom of this post.)
This guidance outlines what states need to do in order to secure waivers to impose work requirements for “non-elderly, non-pregnant adult Medicaid beneficiaries who are eligible for Medicaid on a basis other than disability,” and it makes official what has long been clear: Such waivers will be approved by the Trump administration. Work requirements are coming to Medicaid, a dramatic shift for a program with a mission to provide health coverage to low-income people and people with severe health needs. The guidance suggests that beneficiaries could also meet the requirements through means other than a job: “skills training, education, job search, caregiving, volunteer service.” Seema Verma, head of the federal Centers for Medicare and Medicaid Service (CMS), called it “a new era of flexibility for the Medicaid program” on a call with reporters this morning.
Advocates for beneficiaries argue that work requirements are unnecessary, likely to lead to gaps in coverage and higher uninsured rates, and counterproductive to the goals of the program, and will add layers of bureaucratic complexity that burden beneficiaries and state governments. They also argue that they violate the law. Lawsuits will come immediately once the Trump administration starts approving waivers.
It’s possible that approvals for the pending work-requirement waivers were put on hold until this guidance came out. The guidance is partly seen as an effort to make a legal justification prior to the inevitable lawsuits. The Washington Post sites unnamed sources that an approval for a state could come as soon as Friday, with Kentucky likely first.
No word on when Arkansas approval will come; Hutchinson’s waiver request is a bit more complicated because it also includes a proposal to cut eligibility in the program, removing 60,000 working poor Arkansans from the rolls. That request — often known as “partial expansion,” reducing eligibility from 138 percent of the federal poverty level down to 100 percent FPL — is considered a tougher ask than work requirements, so consideration of the Arkansas waiver may take a bit longer. I asked Verma whether CMS had made any decision on this request from Arkansas (Massachusetts has also made a similar request) — she said the agency was “continuing to evaluate” those requests and had no further comment at this time.
The new CMS guidance on work requirements uses the slightly Orwellian phrasing “community engagement” to describe the new policy. This isn’t an immediate green light. States will still have to submit requests for waivers, known as 1115 demonstration waivers, subject to the federal review process. These are ostensibly designed to be experiments that further the objectives of the Medicaid program, such as expanding coverage for low-income people in a state or improving health outcomes for Medicaid beneficiaries — indeed, that’s a requirement under the law. Critics argue that work requirements do nothing of the kind. This is the legal problem for the Trump administration: Medicaid is a health care program, not a jobs program, and the Medicaid law says nothing about work. How can 1115 demonstration experiments imposing work requirements be seen as “promoting the objectives” of Medicaid, as they must under the law? If anything, kicking people off the rolls if they are unable to work or fail to comply with new bureaucratic requirements would seem to run directly opposite to program objectives.
The Trump administration tries to wriggle around this problem with a strange causal argument: Research on the social determinants of health show that socioeconomic status and education can impact health outcomes — for example, poverty correlates with shorter lifespans and higher risk of depression. The Trump administration’s solution is to take health coverage away from poor people if they fail to comply with the new requirements. This will “incentivize” people to stop being poor, and then they’ll be healthier. Voila.
Under this theory, states would “test the hypothesis” that work requirements would lead to more beneficiaries “being employed or engaging in other productive community engagement, thus producing improved health and well-being.” States would be required design its program to achieve these ends and assess the effectiveness of the requirements on “furthering the health and wellness objectives of the Medicaid program.” The details for such assessments are left vague in this guidance.
The guidance also makes clear that no additional Medicaid funding would be available for the infrastructure to implement these programs. It would be up to states to fund beneficiary support and outreach, job training programs, and other resources that would be necessary to actually achieve the supposed objectives of these new policies.
In addition to limiting work requirements to non-elderly, non-pregnant adults who do not qualify for Medicaid’s disability coverage, the CMS guidance would also place certain other restrictions on which populations could be subject to work requirements — including people who have illnesses or disabilities as defined by other federal statutes outside of Medicaid that interfere with their ability to meet the requirements, individuals determined by the state to be “medically frail,” and individuals “with acute medical conditions validated by a medical professional that would prevent them from complying with the requirements.” (In some cases, a disabled person may be on the Medicaid program under a different category than disability Medicaid; work requirements must comply with federal civil rights laws and offer exemptions or modifications to ensure that Medicaid is not denied to individuals with disabilities who are unable to meet the requirements.) The guidance also states that states will “be required to take certain steps to ensure that eligible individuals with opioid addiction and other substance use disorders (who may not be defined as disabled for Medicaid purposes but may be protected by disability laws) have access to appropriate Medicaid coverage and treatment services.”
The CMS guidance encourages states “to consider a range of activities that could satisfy work and community engagement requirements,” including job training programs and volunteer activities. CMS officials said that they wanted to give states fairly broad flexibility to design what sorts of activities could satisfy the requirements, but that states would have to offer a strong justification if they wanted to purse a narrower list of options to fulfill the requirements.
Hutchinson’s waiver proposal for Arkansas broadly aligns with the federal guidance issued today. Hutchinson’s request would impose work requirements on many beneficiaries in the state’s Medicaid expansion program, which covers low-income adults. Those between the ages of 18-49 would be required to work 80 hours per month; if they are not working, they would have to participate in job training programs, job searches, or certain approved volunteer activities. Beneficiaries must be in compliance for nine months out of the year or they would be removed from the program for the duration of the year.
Beneficiaries 50 or older would not be subject to the work requirement. Exemptions would be available for others who met certain criteria, including full-time students, those caring for an incapacitated person, those caring for dependent children in the home, people receiving unemployment benefits, those who are medically incapacitated due to physical or mental health problems, those participating in a drug or alcohol addiction treatment program, and pregnant women. The state’s Department of Human Services projects that around half of Arkansas Works beneficiaries would be eligible for an exemption.
Non-exempt beneficiaries will have to report their work activity on a monthly basis. They will do so via a website, which is still under development; kiosks will be available in county offices for people who can’t access the site via a computer or other device. Both the DHS and insurance companies will send notices, including emails, if someone is noncompliant, reminding them to report.
The DHS has said that it will take 60 days to implement the changes once federal approval is secured.
Hutchinson issued the following statement in response to the release of the CMS guidance:
This is good news for Arkansas. This is something that we’ve pushed for, and the fact that CMS is issuing this guidance is really the first step in the process of approving the waivers for work requirements for the various states. While this is not an approval of the waiver, it is a very important indication that this is the direction that the Administration wants to go.
I had a conference call earlier this week with the acting HHS Secretary and CMS Administrator Verma on this topic, and I was advised that this was coming, so this is proceeding very quickly at this point. I will review the details of the guidance very carefully, but I expect that our waiver request will be in line with their guidance.