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Work Requirements May Be Just the Beginning of Medicaid Changes Under Trump

States have requested to enact several other unprecedented policies. Kentucky on Friday reportedly became the first to get its waiver approved.

Kentucky Gov. Matt Bevin, left, and President Trump during a prison reform roundtable on Thursday.
(AP/Carolyn Kaster)
After months of speculation, the Centers for Medicare and Medicaid Services (CMS) opened the door on Thursday for states to require some low-income people to work in order to qualify for government-sponsored health insurance.

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. 

Conservative states had asked the Obama administration many times to allow them to impose work requirements. It continually refused, arguing that the policy goes against the goals of the program, which are to give more people access to health insurance.

Republican governors immediately praised the Trump administration's announcement. 

“It will allow states to control the costs of their Medicaid programs by helping more people enter the workforce," tweeted New Hampshire Gov. Chris Sununu.

“Whenever possible, we should always endeavor to help South Carolinians in need find their path to gainful employment and away from the temporary assistance of government,” tweeted South Carolina Gov. Henry McMaster.

Ten states -- Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, Mississippi, New Hampshire, Utah and Wisconsin -- have already requested a waiver from CMS so they can add work requirements to Medicaid. Kentucky’s waiver was approved on Friday, according to CMS documents obtained by The New York Times. 

The new guidance from CMS, however, says many Medicaid beneficiaries should be exempt from work requirements: That includes children, people with disabilities and people in treatment for substance abuse disorders. And the definition of "work," according to CMS, should include job training, volunteering or caring for a relative. 

“This new guidance paves the way for states to demonstrate how their ideas will improve the health of Medicaid beneficiaries, as well as potentially improve their economic well-being,” Brian Neale, CMS deputy administrator, said in a press release.

But work requirements aren't the only idea that states have for health care, and it remains to be seen just how much flexibility CMS will give.

Most of the states' waivers requesting work requirements also include other unprecedented proposals like drug testing requirements and limits on how long someone can have Medicaid coverage.

"When you take all of these things together, it takes away from what the ACA [Affordable Care Act] was trying to do, which was a seamless way to get health coverage,” says Kelly Whitener, associate professor at Georgetown University’s Center for Children and Families.

In Kentucky, for instance, the waiver will also freeze people's coverage if they fail to report any changes in their employment or income. 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.

Meanwhile, Arizona and Maine both requested five-year time limits on how long people could stay on Medicaid, and Wisconsin wants to drug test applicants. 

While those policies have a shot at getting the Trump administration's approval, Solomon says there's at least one proposal that doesn't: asset testing. Asset testing, which Maine has requested to do, would determine a person's eligibility for Medicaid based on their property value and savings -- not just their income. But Solomon says it’s specifically prohibited under Medicaid law. 

“No CMS lawyer would allow [it]. It wouldn’t have a legal leg to stand on,” she says.

The Obama administration didn't reject every request for change. It approved a small number of conservative states' waivers, including those that require beneficiaries to pay a small monthly premium and freeze coverage when premiums aren’t paid.  

Work requirements could have the biggest impact in states that did not expand Medicaid under the ACA. Out of the 10 states that have proposed work requirements, two of them -- Kansas and Wisconsin -- have refused federal money to make more low-income people eligible for Medicaid. Utah enacted a slim Medicaid expansion for chronically homeless people with substance abuse issues, and Maine voters passed Medicaid expansion last fall -- although its implementation is up in the air.

More non-expansion states -- Alabama, Mississippi and South Dakota -- are also considering waivers that would make eligibility even slimmer. Alabama in particular already has stringent eligibility requirements: You have to be a parent and make $3,000 or less per year for a family of four to qualify for health insurance.

Although the first waiver has been approved, the road to work requirements could be longer than their supporters hope: Health policy experts anticipate that lawsuits will be filed quickly.

Mattie covers all things health for Governing.

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