The Trump administration announced Thursday that it will open the door for states to impose work requirements for Medicaid recipients, in a major shift that could affect millions of low-income people receiving benefits.
The Centers for Medicare & Medicaid Services described the decision as a response to requests from states to test work requirement programs.
“Medicaid needs to be more flexible so that states can best address the needs of this population. Our fundamental goal is to make a positive and lasting difference in the health and wellness of our beneficiaries, and today’s announcement is a step in that direction,” CMS Administrator Seema Verna said in a statement.
A letter sent to state Medicaid directors Thursday said the move would help "improve Medicaid enrollee health and well-being through incentivizing work and community engagement."
“Our policy guidance was in response to states that asked us for the flexibility they need to improve their programs and to help people in achieving greater well-being and self-sufficiency,” Verma said, noting the agency has received demonstration project proposals from 10 states: Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, North Carolina, Utah and Wisconsin.
The test programs, according to CMS, could make work, “skills training, education, job search, volunteering or caregiving” a requirement for Medicaid for “able-bodied, working-age adults.” It would not apply to those getting benefits due to a “disability, elderly beneficiaries, children, and pregnant women.”
The move was pitched as an effort to “turn the page” for states in the Medicaid program, to give them more freedom to design “innovative programs” and results, and to “remove bureaucratic barriers.”
The plan will likely face a political battle, which could lead to legal challenges for the Trump administration over concerns that people would lose their Medicaid health care coverage. The plan comes after months of failed negotiations on Capitol Hill to repeal and replace former President Barack Obama’s landmark health care legislation.
Under current law, people are not legally required to hold a job or to be employed to receive Medicaid benefits, but states can request federal waivers to test new ideas for the program. The Trump administration’s latest action outlines guidelines that states should consider to have their proposals for waivers imposing work requirements federally approved. The waivers would be “demonstration projects.”
Medicaid is a federal-state collaboration covering more than 70 million people, or about one in five Americans, making it the largest government health insurance program. Medicaid was expanded during the Obama administration, when an option was provided to allow states to cover millions more low-income adults.
CMS said Thursday that they would support state efforts to align Medicaid work requirements with those of the Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF), which they said may “streamline eligibility” and help reduce the burden on states and beneficiaries.
Under the new policy, states must fully comply with federal disability and civil rights laws to ensure that disabled individuals have the necessary protections to ensure they are not inappropriately denied coverage, CMS said. States will be required to offer modifications to individuals with disabilities and will be required to exempt individuals determined to be “medically frail” or having an “acute condition” that would prevent them from complying with the new requirements.
The Trump administration has been vocal about adding the new requirements for almost a year, but a study from the nonpartisan Kaiser Family Foundation revealed that more than half of working-age adults on Medicaid are already employed. Nearly 60 percent work either full time or part time, mainly for employers that do not offer health insurance. The study said most who are not working report reasons like illness, caring for a family member or going to school.
The Kaiser Family Foundation also conducted a poll in 2017, which revealed 70 percent of the public support allowing states to impose work requirements on Medicaid beneficiaries.
"It is a very major change in Medicaid that for the first time would allow people to be cut off for not meeting a work requirement, regardless of the hardship they may suffer," said Judy Solomon of the Center on Budget and Policy Priorities, which advocates for the poor. The Obama administration would have never approved such waivers, she added.
