Medicaid Work Requirements May Lead to Expanded State Programs

Health Insurance

January 30, 2018

States that didn’t expanded Medicaid under Affordable Care Act guidelines may soon extend their programs thanks to the Trump administration’s willingness to grant waivers allowing work requirements. Under Obamacare, states have the option to expand their Medicaid programs to cover people earning up to 133 percent of the federal poverty line. To date, 32 states along with the District of Columbia have opted for expansion. Holdouts are largely conservative, with states like Kentucky and Idaho arguing that expanding Medicaid would drain state resources.

This month, the Department of Health and Human Services granted a Kentucky waiver request that will impose work requirements and premiums on that state’s Medicaid population, a controversial move that many conservatives support.

It’s this willingness to grant waivers – and impose work requirements, among other stipulations – that may garner interest in expansion for states that have yet to expand. Kentucky’s new Medicaid guidelines will take effect in April with full implementation by July. Seven additional states have approved Section 1115 waivers. In November, Maine voted to expand Medicaid, but changes won’t take effect until this summer.

Conservatives have long held that Medicaid is a wasteful entitlement program, but more moderate Republicans in some state legislatures have urged for expansion since the ACA became law. Among the states considering expansion now that work requirements are an option are Utah, Wyoming, Idaho, North Carolina, Kansas and Virginia. Some states may be more successful than others. Lawmakers in Virginia, for instance, may face significant challenges not only from conservative Republicans but Democrats as well. Many Democrats do not support work requirements or other similar stipulations for Medicaid, arguing that the program is meant to provide health insurance without strings attached.

Medicaid is a joint program funded partially by the federal government but administered by individual states. It provides free or low-cost healthcare coverage to low-income people, mainly pregnant women, the disabled, the elderly and children. This is the first time in the program’s 53-year history that work requirements have been a condition for enrollment in any state. Experts are divided on how these requirements might impact enrollment and accessibility.

There are fiscal incentives for states to expand Medicaid, and polls suggest popular support for adding work requirements for able-bodied Medicaid recipients. Still, advocates for the poor argue that including work requirements or other conditions may limit access to the program. Others argue that most able-bodied Medicaid beneficiaries already work and that work itself doesn’t translate to better health.

The Trump administration’s decision to grant waivers has been seen as an effort to curtail Medicaid enrollment and force able-bodied recipients to transition out of the program, a fact that Centers for Medicare and Medicaid Services Administrator Seema Verma confirmed by implying that working leads to a healthier population, one less dependent on government programs for healthcare.

Ironically, the effort to curtail Medicaid enrollment may translate into widespread expansion for state Medicaid programs as states seek to bolster their programs through premiums, community involvement and other conditions for enrollment. Utah alone has 46,000 people who could qualify for Medicaid if the program were expanded in that state, but Kaiser Family Foundation points out that work requirements might undermine final enrollment numbers. Since the ACA became law, Medicaid expansion has resulted in about 13 million additional people nationwide being covered by state programs.