The Trump administration on Thursday said it would allow states to require that Medicaid enrollees hold a job, volunteer, or enroll in classes.
The provisions for people who receive government-funded medical coverage through Medicaid, which were not allowed under the Obama administration, are often dubbed “work requirements" and are being referred to by the administration as "community engagement."
The guidelines would allow states to require that some Medicaid enrollees hold a job, participate in volunteer work, or enroll in classes or work training for a certain number of hours each week. States could choose to include caregiving for a disabled child or elderly adult as meeting the requirement.
"This is in response to proposals we are receiving from states. It is entirely optional for states," Seema Verma, administrator for the Centers for Medicare and Medicaid Services, said in a phone call with reporters Wednesday. "This is in no way a requirement."
The guidance contains numerous exemptions, and states cannot enact programs until they are approved through a waiver by CMS. Medicaid recipients would not need to abide by the stipulations if they are elderly, disabled, children, or pregnant. It also allows states to determine that specific populations are medically frail, such as providing exemptions for people who are undergoing treatment for an opioid addiction.
Ten states — Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, North Carolina, Utah, and Wisconsin — have asked to be allowed to implement the requirement. Verma declined to say which waivers were set to be approved, but did allow that "now that we have taken this big important step, we expect that you will hear from us on waivers in short order."
States would be required to track what happens as a result of implementing conditions on Medicaid, including information about how many people lose coverage as a result of the programs, and to make the information public.
Brian Neale, CMS deputy administrator and director for the Center for Medicaid and CHIP Services, said on the call that states could implement restrictions similar to those established under other programs, such as food stamps, formally called the Supplemental Nutrition Assistance Program, or the Temporary Assistance for Needy Families. He said states could make their own specifications, including determining how many hours someone would need to work each week. People with specific medical needs would not be targeted, he said.
"States must exempt any individual with an acute medical condition validated by a medical professional that would prevent them from meeting the requirements. This includes an individual with a substance abuse disorder," he said.
Medicaid has been a politically charged program. Obamacare was written to have all states expand Medicaid to anyone making less than about $16,000 a year, but a Supreme Court decision made the provision optional for states. As a result, 18 states have not expanded the program. (Maine voters expanded the program under a ballot measure, but it is being held up by Republican Gov. Paul LePage over concerns about funding.)
Some states that did expand are looking to shed their Medicaid rolls to cut back on costs. People who are covered by Medicaid pay nothing or little for the care they receive. The federal government paid for the full cost of expansion at the start, in 2014, but it gradually is phasing its share to 90 percent by 2020, which will mean hundreds of millions, or billions, of additional dollars in spending for some states. Beginning in 2017, states paid for 5 percent of the Medicaid expansion.
Some states have turned to to work requirements as a way to reduce costs, while others say that the provision would help make the program more politically palatable. Republicans often lament that the program has only an income requirement and that "able-bodied," "working-age" adults can enroll, regardless of their life situation, wealth or disability. Even states that have not expanded Medicaid have fretted over the program's costs.
Matt Salo, executive director of the National Association of Medicaid Directors, said allowing states to implement the requirements may lead to more expanding Medicaid.
"Is this enough to trigger all non-expansion states tomorrow? Probably not, but it moves the needle more toward expansion," he said.
Verma said the Trump administration views Medicaid as a vehicle to help move people out of poverty, and said that work or community engagement could help improve health outcomes. Polling shows that imposing work requirements has widespread public support, with 70 percent approval in a survey from the Kaiser Family Foundation, an organization that studies health policy.
But the announcement is likely to invite backlash from critics, including Democrats. Opponents to work requirements say they would impose a barrier on people who need coverage and hurt a demographic Medicaid is supposed to help. The true intent, they have argued, is to assuage middle-income voters who stigmatize low-income people. They have been concerned that people who are caregivers would be targeted, or that people who need to undergo care full time, like someone with cancer, would be unable to provide proper documentation.
A Kaiser Family Foundation brief about work requirements in other programs, such as SNAP and TANF, raised questions about their effectiveness in getting people employed and said states spend a large amount of time and money making sure the requirements are followed.
CMS addressed some of those criticisms in its call. For instance, to help people find work, Neal said states need to outline how they would take into account the circumstances of residents, including what to do in neighborhoods where unemployment is high because few job opportunities are available.
Medicaid covers 43 million Americans, with 15 percent of Medicaid dollars going toward people who can be described as "able-bodied" and "working-age" adults. Most funding goes toward children, older Americans, and people who are disabled. Verma said she was aware that most Medicaid recipients had jobs and said she didn't expect the policy would affect them.