Feds encourage work requirement in Medicaid for able-bodied adults

Illustration created using Getty Images

The state will still have to apply for a waiver and undergo the full federal review process, but CMS will now support state efforts to "test incentives that make participation in work or other community engagement a requirement for continued Medicaid edibility", according to the January 11 letter.

Kentucky is the first state to be allowed to impose work requirements in its Medicaid program, a change that Gov. Matt Bevin has pushed.

And while the LePage administration tries to argue in its waiver application that imposing work requirements improves people's economic circumstances, its own analyses have shown this isn't the case.

The Maine Department of Health and Human Services past year sought federal Medicaid officials' permission to require non-disabled, low-income adults enrolled in Medicaid to work as a condition of receiving coverage.

It's a "large and sharp reversal" from Medicaid in the past, says Judith Solomon, vice president of health policy at the Center on Budget and Policy Priorities.

Kentucky, which has some of the poorest counties in the country, has seen its Medicaid enrollment double in the past three years after the state expanded eligibility under the ACA.

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Jill Hunter, deputy commissioner of the Kentucky Department of Medicaid Services, said in November that her office estimated about 10 percent of Medicaid recipients in Kentucky will get a "medically-frail" designation and be exempt from the premiums, copays and work or volunteer requirement. That will be a problem, says Solomon, because low-income people tend to work in retail and food service jobs, where hours can vary from week to week. Ten states -including IN and Kentucky - have submitted proposals to add a so-called work requirement to their Medicaid plans. Solomon estimates that fewer than 2 percent of the 74 million people covered would be directly affected by a work requirement. CMS said states would have to test whether the work requirement improves enrollees' health - a point Solomon ridiculed. "We don't have childless able-bodied working age adults in our system, so I don't know how that would transpose to us". But the long-anticipated CMS announcement - made clear in a letter to states released early Thursday - is a bad sign for some health care advocates, who worry that people will lose coverage because of the additional administrative burden of the requirement.

They will continue to get vision and dental benefits, and either have to make a monthly payment - called a premium - or a payment at the time of a medical service.

Pugel previously had told Insider that many people who will lose coverage have chronic illnesses that will go untreated until the severity of their conditions brings them to local emergency rooms, where they will receive expensive care that will be paid either by the hospitals through charity care - or by people with insurance who pay higher rates than they normally would. About 52 million of the 74 million Medicaid enrollees rely on managed-care companies for their coverage.

"They are illegal and not permissible under law", said Leonardo Cuello, a lawyer with the Washington-based National Health Law Program, which anticipates filing a lawsuit challenging Kentucky's plan. The work requirements will likely be challenged in court. Bevin said he expects the program to be fully implemented at the beginning of next year.

But critics suggest the move could leave many people uninsured. "The result will be a transformational improvement in the overall health of our people and will provide a model for other states to follow", Bevin said.

If proponents of work requirements are serious about helping people find work, they would invest in skill training and workforce development programs, rather than increasing red tape and making it harder for people to access health care.

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