The Trump administration signaled Tuesday that it would allow states to impose work requirements on some adult Medicaid enrollees, a long-sought goal for conservatives that is strongly opposed by Democrats and advocates for the poor.
Such a decision would be a major departure from federal policy. President Barack Obama’s administration ruled repeatedly that work requirements were inconsistent with Medicaid’s mission of providing medical assistance to low-income people.
The announcement came from Seema Verma, the head of the Centers for Medicare & Medicaid Services (CMS), who was scheduled to address the nation’s state Medicaid directors Tuesday. A press release issued in advance of the speech said allowing states to have work requirements is part of her plan to help give states more flexibility.
“The thought that a program designed for our most vulnerable citizens should be used as a vehicle to serve the working-age, able-bodied adults does not make sense, but the prior administration fought state-led reforms that would’ve allowed the Medicaid program to evolve,” Verma said in a copy of her remarks released moments before she spoke.
“For people living with disabilities CMS has long believed that meaningful work is essential to their economic self-sufficiency, self-esteem, well-being and improving their health,” she said. “Why would we not believe that the same is true for working-age, able-bodied Medicaid enrollees?”
Eight states — Arizona, Arkansas, Indiana, Kentucky, New Hampshire, Maine, Utah and Wisconsin — have submitted requests to CMS seeking to require nondisabled Medicaid enrollees to either work or provide community service.
The advance copy of Verma’s remarks did not say when she would rule on the pending applications, but one CMS official said it would likely be before the end of the year.
Studies show the vast majority of Medicaid enrollees are already working, looking for work, going to school or caring for a relative.
About 59 percent of nondisabled adults on Medicaid who are under 65 do have jobs, according to the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)
Verma emphasized the agency’s commitment to considering proposals that would give states more flexibility to test efforts to move enrollees out of poverty.
“Every American deserves the dignity and respect of high expectations, and as public officials we should deliver programs that instill hope and say to each beneficiary that we believe in their potential,” Verma said.
States and the federal government split the costs of the $575 billion Medicaid program, which covers 74 million people. States are allowed to set benefits and eligibility rules within broad federal guidelines.
Since the 1990s, the federal government has increasingly allowed states to temporarily waive Medicaid rules to give states the ability to experiment with how they administer the program. States have used those options for efforts such as adding monthly premiums or customizing their expansion of Medicaid under the 2010 Affordable Care Act.
Two long-term requirements of such waivers are that they do not increase federal costs and they improve health coverage of the poor.
CMS said Tuesday that expanding access is no longer a key purpose of federal Medicaid waivers. This statement represents a philosophical change in the program that would open the door to approve work requirements, which states acknowledge would reduce number of people enrolled.
“It tells me that the agency is preparing to disavow a central objective of federal law and instead will attempt to accomplish exactly what the law does not countenance, namely, a reduction in the level of assistance available to the poorest and most medically vulnerable Americans,” said Sara Rosenbaum, a health policy and law professor at George Washington University in Washington, D.C.
Verma’s decision had been widely expected. Before being appointed to CMS, she was a health care consultant and she helped the Indiana and Kentucky Medicaid programs draw up their waiver requests, including work requirements. To avoid a conflict, CMS said Verma will not be involved in decisions on those two states.
A decision to support work requirements would likely end up in a court battle, said Jane Perkins, legal director of the National Health Law Program, an advocacy group. Perkins said CMS has power to allow states to experiment with the Medicaid program but not by curtailing eligibility.
“This is really a change in the complexion of the Medicaid program where CMS is saying to states, ‘Come tell us what you want to do and if you want to cut back the program, we will give you the go ahead,’” Perkins said. “That is inconsistent with congressional intent” of Medicaid waivers.
Verma’s address to the National Association of Medicaid Directors meeting marks one of her few public appearances since taking office. Despite overseeing both Medicaid and Medicare — programs that affect more than 120 million Americans — she has given few interviews or public speeches.
She has frequently been mentioned as a possible replacement for Health and Human Services Secretary Tom Price, who resigned in September following allegations of wasteful travel spending.
Republican governors defend work requirements, saying such a mandate would provide “dignity” to enrollees and spur them to not count on the government entitlement program.
“This program offers opportunities for individuals to take control of their life,” Kentucky Gov. Matt Bevin, a Republican, said in July when revising his work requirement proposal.
Opponents of work requirements assert that many Medicaid enrollees already work and a mandate is counterproductive. Denying people access to health care could keep them from staying healthy and being able to be employed, they say.
Verma’s speech came after an announcement by CMS on Monday that it would streamline the often-arduous process to get Medicaid waivers. It offered to fast-track some requests and said it would allow states to get waivers for up to 10 years — five more years than currently allowed.
Verma also said the federal government would release scorecards showing Medicaid outcomes, but she gave no details on what measures would be evaluated.
Most Medicaid enrollees are in private managed care plans, which get evaluated each year by states, looking at everything from vaccination rates for children to cancer screening rates for adults.
More than 16 million people have been added to Medicaid since 2013, mostly as a result of 31 states expanding eligibility under the federal health law.
Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.