On January 11, the Trump administration announced that it would allow states to impose work requirements on Medicaid recipients who are able-bodied. Community engagement activities, such as volunteer work, may be substituted for employment in some cases.
Positive and Lasting Difference
According to the administrator of the federal Centers for Medicare and Medicaid Services (CMS), Seema Verma, the change is designed to create a “positive and lasting difference in the health and wellness” of Medicaid beneficiaries. Ms. Verma said that ten states had asked to run demonstration projects for Medicaid recipients that could include training, education, assistance with job searches, volunteering and caregiving. This change is similar to requirements for those receiving food stamps known as the Supplemental Nutrition Assistance Program (SNAP) as well as the Temporary Assistance for Needy Families (TANF).
Decreasing Medicaid Enrollments
The main purpose of the work requirement is to lower the number of people who are enrolled in Medicare. Ms. Verma said that the belief that requiring people to work or engage in the community in some way while they are enrolled in Medicare demonstrates “soft bigotry of low expectations.”
One of the states who has requested a waiver to require Medicaid enrollees to work is Kentucky. Their plan would require any able-bodied person who is between the ages of 19 and 64 to work at least 20 hours per week in either paid employment, volunteer work, job training, attending school or taking care of someone who is disabled or elderly. Seeking work would also meet the state criteria. Women who are pregnant, full-time students, disabled adult dependents and people who are the primary caretakers of children under the age of 19 would be exempt along with those who are medically frail.
Unemployment Harmful to Health
Officials point to studies that indicate unemployment is harmful to health as another reason why requiring Medicaid recipients to work could reduce costs. A study published in the American Journal of Public Health found that unemployed men had more visits to their doctor, took more medication and spent more time in bed due to illness than those who were employed. Other studies have linked unemployment with higher mortality rates as well. However, the Kaiser Family Foundation found that Medicaid may actually support work as individuals are able to get medication for conditions that kept them from working, like asthma or arthritis, that they could not afford previously.
Medicaid is Not a Work Program
Opponents of the requirement say that Medicaid is not designed to provide healthcare to those who can’t afford other coverage, not one designed to put people to work. Leni Preston, Vice-President of Consumer Health First, said that requiring Medicaid recipients to work will work against what Medicaid is meant to provide. She points to the fact that 39 percent in her state of Maryland who receive Medicaid are disabled, a number that is slightly higher than the national average of 36 percent. Getting documentation to prove that they are working or involved in “social engagement” could be difficult for many Medicaid recipients, especially those in rural areas. In addition, Ms. Preston said that requiring recipients to work could discourage them from signing up for the program which would mean a loss of healthcare coverage for many.
States to Monitor Outcomes
CMS officials say that concerns that requiring Medicaid recipients who are able-bodied to work will discourage signups for the program are overblown. They claim that as people begin to obtain employment and increase their earnings, the number of recipients could decrease. In addition, employment and earnings could pull many people out of poverty and help them stop using public assistance overall. States who are permitted to create demonstration projects that require Medicaid recipients to work must closely monitor how well the programs are working. This includes determining how many individuals lose Medicaid coverage because they chose not to sign up due to the work requirements as well as those who drop from Medicaid because they become employed.
Many Medicaid Recipients Already Working
Opponents to the new regulation say that approximately 80 percent of able-bodied Medicaid recipients are families with at least one part- or full-time worker. Nearly half are employed by small firms that may not be required to provide health insurance under the Affordable Care Act (ACA). Approximately 1 in 10 working people on Medicaid are in the restaurant or food service industry who may be paid off the books, making it difficult for them to obtain documentation of employment.
Requiring recipients to work is not the only change authorized by the Trump administration. Kentucky has also been given authorization to charge monthly premiums ranging from $1 to $15. The state can suspend coverage for those who do not keep up with payments and the amount paid will be based on income. The state is also funding high-deductible health savings accounts to Medicaid recipients. There will also be incentives offered to encourage recipients to purchase other benefits, like dental and vision insurance.
In addition to requiring recipients to work, other states have asked for additional waivers from the federal government. Indiana is hoping to require Medicaid recipients who smoke pay a fee when they enroll while Arizona, Utah and Kansas would like to limit how long someone can remain on Medicaid to between three and five years depending on the state. Iowa has been given permission to limit how providers are paid when they treat Medicaid patients. Some states would like to make recipients ineligible if they do not meet the new requirements. In Kentucky and Indiana, the ineligibility would be for six months unless they complete a training course while in Arkansas, the state would block reenrollment until the following year. Utah is also asking for a $25 fee if Medicaid recipients visit an emergency room if the visit is deemed to be a non-emergency while Arizona wants to deny payment when a recipient visits the emergency room for a non-emergency.
Lawyers for advocacy groups are claiming that work requirements don’t promote Medicaid objectives because they could be a barrier to coverage. However, the administration has significant flexibility in determining the objects of the program. Not everyone will be required to work, the administration points out. In Kentucky, people with cancer, blood-clotting disorders or those with substance abuse disorders are exempt. Kentucky claims that 95,000 people would no longer have Medicaid coverage, but that only a fraction would be because they refused to comply with the work requirement. The majority, they say, will be people who have found employment and no longer need Medicaid. Despite the arguments on both sides of the fence, it appears that at least ten states will create test programs to determine how effective work requirements for Medicaid recipients can be.