Medicaid Work Requirements Controversy to Intensify This Week: NYAPRS

Monday, November 6, 2017

NYAPRS: Controversy over Medicaid Work Requirements to Intensify This Week
NYAPRS E-News November 6, 2017

NYAPRS Note: Politico reports today that CMS, the federal Medicaid agency, is developing federal guidance that is expected to lead to a letter to state Medicaid directors on how states could use waivers to impose work requirements in Medicaid. Kentucky, Indiana, Arkansas, New Hampshire, Maine, Wisconsin and Kansas have either already asked CMS to approve Medicaid waivers that include work requirements or will submit proposals shortly. CMS administrator Seema Verma and others have previously defended the policy, saying that it's necessary as Medicaid has expanded now that “the program covers millions of low-income adults who aren't disabled and primarily don't have dependent children.” 
Opponents of Medicaid work requirements recently released a paper entitled “Medicaid Works: No Work Requirement Necessary” that can be found at CLASP says that “having failed to cut Medicaid through legislation, the Trump Administration is moving forward with administrative actions that would permit states to impose roadblocks to enrollment.” It emphasizes that fighting back on Medicaid waiver proposals will require determined efforts by the same broad coalition of health advocates, consumers, providers, and children’s organizations that defeated those recent legislative proposals. Stay tuned for more….

According to Modern Healthcare, CMS Administrator Seema Verma is expected to address the possibility of Medicaid work requirements at tomorrow’s address to the National Association of Medicaid Directors annual conference.

MH writes that “since being confirmed in March, she has been vocal about wanting to empower state officials to craft Medicaid programs that include conservative policies such as work requirements, cost sharing, drug tests and lifetime limits on enrollment.

Verma has also talked at length about scaling back a mega managed-care rule finalized under the Obama administration that imposed a variety of new requirements. However, the CMS last summer decided to retain some controversial parts of the rule, including stricter standards to ensure that managed-care rates are actuarially sound and cover all medical and administrative costs, taxes and fees for which the health plan is responsible.

Managed-care plans also must calculate and report their current medical-loss ratio, which is a breakdown of what the plans spend on medical care versus other activities, including employee salaries, marketing, profits and administrative tasks.

The agency said that these provisions have significant federal fiscal implications for the Medicaid program, so it will continue to require compliance.”

Politico predicts that such a move will lead to a host of lawsuits, spurred by Democrats and left-leaning consumer advocate groups, arguing that it would set back the program's goal of providing health coverage to low-income Americans.

CLASP, “a national, nonpartisan, anti-poverty nonprofit advancing policy solutions for low-income people” recently wrote that adding work requirements to Medicaid is a terrible idea for several reasons, including:

  • People would lose their health insurance. In fact, the nonpartisan Congressional Budget Office said that states would use work requirements to reduce enrollment in Medicaid. This holds true when you look at the waivers submitted to CMS. For example, Kentucky estimates that its waiver, which includes a work requirement, would cause 95,000 fewer people to be insured by Medicaid if the waiver is approved.
  • Employment outcomes won’t improve. Lessons learned from other programs demonstrate that work requirement policies do little to help people find and keep work and, in fact, are ineffective at connecting people to living-wage jobs that provide affordable health insurance. A better policy focus would be to invest in programs designed to help people develop skills and training for in-demand jobs, help people get the education they need to climb the career ladder, and foster an economy that creates more jobs.
  • People may find it harder to work or stay employed. Medicaid expansion enrollees from two states reported that having Medicaid made it easier to look for employment and stay employed. Making access to Medicaid more difficult may have the exact opposite effect on employment.
  • The reality of today’s economy and jobs is very different than what these policies envision. Many Medicaid enrollees already work—often in industries like retail and food service—yet because their jobs do not provide health insurance benefits, they continue to rely on Medicaid for affordable health insurance.
  • Additional red tape and bureaucracy will be a barrier to enrollment for everyone. New paperwork requirements will cause many people, including those who are eligible, from completing the application and enrollment process.”

CLASP goes on to say that “the bottom line is that policies purporting to be “well-intentioned,” such as work requirements, play out very differently in reality and often cause unnecessary burden on families that are already experiencing high levels of stress just to get by on a day-to-day basis.

Some of the states that have proposed work requirements would only target childless adults. However, at least five states include parents, which would have negative effects on their children. First, disruptions in parents’ coverage make it more likely that parents won’t be healthy enough (either physically or mentally) to be at their best for their children. Second, when parents are uninsured, children are less likely to have health insurance and a regular source of care.”