To Stay on Medicaid, You May Have To Start Working: Trump’s Decision Sparks Fury

The Trump administration’s watershed decision to allow states to test a work requirement for adult Medicaid enrollees sparked widespread criticism from doctors, advocates for the poor, and minority and disability rights groups.

Conservatives, however, hailed the change to the federal-state program for low-income people. Stephen Miller, the Medicaid commissioner for Kentucky, which received authority Friday to implement a work requirement (see below), said the new policy will “allow states the flexibility to pursue innovative approaches to improve the health and well-being of Medicaid beneficiaries.”

Yet states considering whether to enact the controversial strategy face major hurdles. They will have to figure out how to define the work requirement and alternative options, such as going to school or volunteering in some organizations; how to enforce the new rules; how to pay for new administrative costs; and how to handle the millions of enrollees likely to seek exemptions.

Take Arizona, one of the 10 states that have applied for federal approval for a work requirement. The state must settle basic questions, including whether people would have to meet the new conditions at the time of enrollment, at the annual renewal of their Medicaid coverage or at another time.

Jami Snyder, deputy director of the Arizona Medicaid program, said a key goal for the state is to help people find jobs — not to reduce its Medicaid enrollment, which stands at 1.9 million.

“Infusing the requirement into our eligibility requirements acts as a nice incentive for enrollees in their effort to seek out employment and job training,” she said.

But the state today doesn’t know how many of its enrollees are already employed, said Snyder.

“We are still working through all the operational details,” she explained.

Seema Verma, administrator for the Centers for Medicare & Medicaid Services, said she hopes the new work requirement will improve enrollees’ health while reducing Medicaid rolls. The policy change should help people find jobs that offer health coverage or make enough money to afford private plans, she said.

Critics expressed skepticism. They say the work requirement proposal — which was repeatedly rejected by the Obama administration on the argument it would interfere with providing health coverage — is a more subtle way to reduce the number of non-disabled adults added to Medicaid under the Affordable Care Act. That Medicaid expansion was sharply criticized by conservatives, and Republicans in Congress tried to add work requirements in their unsuccessful bid last year to overturn the health law.

“This is an effort to walk back the Medicaid expansion,” said Judith Solomon, vice president of the Center on Budget and Policy Priorities, a Washington-based research organization. CMS said states would have to test whether the work requirement improves enrollees’ health — a point Solomon ridiculed. “What health outcome will be improved if we take away health care from those not able to work?” she asked.

Dr. Richard Pan, a California state senator and pediatrician in Sacramento who sees Medicaid patients, said the idea just “doesn’t make sense.” By making it harder for people to have health insurance, “you’re going to make it less likely for them to work,” he said.

Pan, a Democrat, said the proposal would create more bureaucracy and “feeds into a fiction” that Medicaid enrollees don’t work — or don’t want to work.

More than 4 in 10 non-disabled adults with Medicaid coverage already work full time.

Despite their concerns about the change in Medicaid policy, critics of the plan acknowledge that it will touch only a fraction of the nation’s total enrollment. Solomon estimates that fewer than 2 percent of the 74 million people covered would be directly affected by a work requirement.

In addition to the large group of enrollees already working, the federal guidelines excluded children — who make up nearly half of Medicaid enrollees. Also off the hook are the more than 10 million enrollees who have a disability. Many of those left either to go to school or take care of a relative or are too sick to work.

The CMS guidelines give states wide latitude in enacting work requirements, and state rules may differ on who gets exempted from the mandate. Arizona’s proposal has one of the longest lists of exemptions, including people 55 and over, victims of domestic violence, American Indians and individuals who have experienced a death of a family member living in the same household.

It is unclear how enrollees will prove they meet such criteria or if states will use the honor system. Florida may not move ahead with a work requirement this year. House Speaker Richard Corcoran, R-Land O’ Lakes, told The News Service of Florida last week that the state’s $26 billion Medicaid program is comprised mostly of children and seniors and that work requirements are more geared toward able-bodied adults who qualify for Medicaid under the Affordable Care Act, commonly called Obamacare.

“I think that’s geared toward Obamacare expansion, not to our plan since we didn’t expand,” Corcoran said of imposing work requirements. “We don’t have childless able-bodied working age adults in our system, so I don’t know how that would transpose to us. If you look at our Medicaid population, mostly children, mostly seniors, and single pregnant moms, I don’t think that is necessarily something that we would do.”

In comparison, Kentucky seeks to exempt children; pregnant women; primary caregivers for children or a disabled relative; people who are medically frail; and full-time students.

Emily Beauregard, executive director for Kentucky Voices for Health, an advocacy group, said one of the key exemption issues states must work out is defining who is “medically frail”— a designation that CMS said would exempt enrollees from the requirement. The federal government, however, leaves the qualifying characteristics up to states.

Before coming to Washington last year, Verma was a health consultant who worked with Indiana and Kentucky to expand Medicaid under the ACA. But in a speech to the nation’s Medicaid directors in November, Verma said adding non-disabled adults to Medicaid was a mistake for a program designed to help children, the disabled and pregnant women.

“The thought that a program designed for our most vulnerable citizens should be used as a vehicle to serve working-age, able-bodied adults does not make sense,” she said at the time.

Some Democratic-leaning states are not expected to make the change. California health care leaders dismissed the idea of imposing a work requirement on the state’s Medicaid enrollees, saying it would never come to pass.

Kevin de León, a Democrat and the leader of California’s Senate, wouldn’t comment on the proposal because he said it’s a non-starter.

“This is not an option we are considering,” said Jennifer Kent, director of the state Department of Health Care Services, which administers Medi-Cal, the state’s Medicaid program that covers about 13.5 million Californians.

Most states contract with private health insurers to run much of their Medicaid operations. Those insurers said they remain concerned that as the work mandate unfolds, their jobs might become harder because of increased churn in enrollment and administrative work. About 52 million of the 74 million Medicaid enrollees rely on managed-care companies for their coverage.

“With this guidance from CMS, it will be essential for states and stakeholders in the states — including insurance providers — to understand the details of who will be impacted by work requirements, how these requirements will be defined and administered, and how people who are impacted will be directed to new pathways for coverage and care,” said Kristine Grow, a spokeswoman for America’s Health Insurance Plans, a national trade group.

Jeff Myers, president and CEO of the Medicaid Health Plans of America, another trade group, noted that most people on Medicaid already work. He said his group is concerned work requirements could affect how the health plans operate. They will need to “see all of details from states,” he said.

—Phil Galewitz and Pauline Bartolone

Kentucky Is First State Granted Approval For Medicaid Work Requirements

Thousands of poor adults in Kentucky will have to find jobs and pay monthly premiums to retain their Medicaid coverage as a result of drastic changes to the state’s health insurance program approved Friday by the Trump administration.

With the long-expected decision, Kentucky becomes the first state to win federal approval to test a new work requirement in Medicaid, a controversial policy shift likely to result in a court battle over whether the administration overstepped its legal authority.

“I was raised by a father who said, ‘Don’t take something that is not earned,’” said Republican Gov. Matt Bevin in announcing the approval of Kentucky’s Medicaid waiver. “The vast majority of able-bodied men and women, able-bodied Kentuckians, they want the dignity associated with being able to earn and have engagement in the very things they are receiving, and an opportunity not to be put in a dead-end entitlement trap but given a path forward and upward.”

Conservatives say the work requirement can help lead people to employment and off the state-federal health program. Democrats, health providers and patient groups say the measure adds another stumbling block for people to keep their coverage.

“By lessening dependence on government assistance and promoting individual self-sufficiency, Kentucky’s efforts should also help to promote the fiscal sustainability of the program to better protect services for the Commonwealth’s most vulnerable,” Demetrios Kouzoukas, principal deputy administrator of the Centers for Medicare & Medicaid Services, wrote in his Kentucky approval letter. “Overall, CMS believes that Kentucky HEALTH [Helping to Engage and Achieve Long Term Health] has been designed to empower individuals to improve their health and well-being.”

The approval comes one day after the Trump administration released guidanceto states on how to design and test programs that require work as a condition of receiving Medicaid.

A study by the Kaiser Family Foundation found that 6 in 10 non-disabled adults on Medicaid already work at least part time, although they often aren’t offered health benefits through those jobs or can’t afford them. (Kaiser Health News is an editorially independent program of the foundation.)

Surveys show that many Medicaid enrollees who don’t work are in job training, go to school or are taking care of a child or an elderly relative, conditions that would make them exempt from the new mandate, according to the CMS guidelines.

Kentucky’s program would require non-disabled adults  each month to participate in 80 hours of work, job training, education  or other qualified “community engagement.”

Those who are exempted include children and former foster care kids, pregnant women, senior citizens, people who are the primary caretakers for a child or a disabled adult, those who are deemed medically frail or diagnosed with an acute medical condition that would prevent them from working, and full-time students.

Officials acknowledge that the work requirement — coupled with other changes in its waiver request — would lead to about 95,000 fewer people enrolled after five years. But many of those would drop out not because of finding work but because they can’t overcome the new bureaucratic hurdles, say advocates for the poor.

“We expect that fewer people will be able to stay enrolled in coverage due to all of the red tape and penalties they’ll encounter,” said Emily Beauregard, executive director for Kentucky Voices for Health, an advocacy group. “Keeping up with the reporting requirements alone will be enough of a burden on people who have two or three part-time jobs that they’ll either lose coverage at some point or may decide it’s not worth enrolling to begin with.”

The Kentucky approval brings other major changes to the state’s Medicaid program, which has doubled in enrollment to 1.2 million people since the state expanded eligibility in 2014 under the federal Affordable Care Act.

The revisions would cut dental and vision coverage for many adults, although they can regain it by completing health-related activities, such as taking a disease management class or volunteering.

Individuals with income above the poverty level ($12,060) who do not pay their premiums in 60 days will be kicked out of coverage for six months. Enrollees can return to the program earlier if they pay two months of missed premiums and make one new premium payment. They also must complete a financial or health literacy course.

The state also eliminates its non-emergency transportation benefit for some adults in the program.

Under Kentucky HEALTH, enrollees will make a monthly payment ranging from $1 to $15 depending on income. Pregnant women and children will be exempt from that cost sharing.

The Kentucky Medicaid changes generally mimic those of neighboring Indiana, which altered its program in 2015 under then-Gov. Mike Pence.

CMS Administrator Seema Verma recused herself from the Kentucky decision because she had worked with state officials on the waiver request when she was a consultant before joining the Trump administration.

Kentucky is one of 10 states that have applied to CMS to enact a work requirement.

The work requirement is one of the biggest changes in the history of Medicaid, which covers more than 74 million people, or about 1 in 5 Americans. It is the nation’s largest health insurance program.

The majority of enrollees in Medicaid are children, pregnant women and elderly nursing home residents. But the expansion under President Barack Obama led to millions of non-disabled low income adults added to the program.

–Phil Galewitz, KHN