In Red States, Work Requirements Follow Medicaid Expansion

Contributor(s)s : Simrandeep Kaur - Associate Analyst, Market Access

Publish date: 04 Jan, 2019

The Centers for Medicare & Medicaid Services has made work requirements for Medicaid a priority, and those requirements are rolling out in select states. Early returns indicate that enrollment is likely to drop once those requirements go into effect.

In December 2018, CMS approved work requirements in Michigan and Maine. Wisconsin’s Medicaid work requirements waiver was granted federal approval on Oct. 31, 2018. Michigan, Maine, and Wisconsin are the latest to get approval for implementing Medicaid restrictions after Kentucky, Indiana, New Hampshire, and Arkansas. Wisconsin’s BadgerCare Reform waiver made it the first approval to be given to a non-expansion state. Wisconsin is different from other non-expansion states since it already accepts low-income residents earning up to the federal poverty level.

Like most other work requirement proposals, Wisconsin’s waiver requires Medicaid members to participate in work and work-related activities for 20 hours a week and comply with the requirements within four years before losing coverage for six months. The BadgerCare Reform waiver comes with looser restrictions compared to the waivers approved in other states.

Another long-delayed waiver in a fifth state could be about to move forward. Kentucky’s 1115 waiver, Kentucky HEALTH, got reapproved by the Trump administration on Nov. 20, 2018. The waiver, initially the first one to be approved by CMS, was blocked by a federal judge in June 2018. Since then, Kentucky’s waiver had been put on hold by CMS to get open public comments from other organizations.

For Medicaid members who have trouble holding work, loss of benefits could mean abandonment of maintenance drugs or putting off necessary medical care. The requirements overwhelmingly affect Medicaid expansion enrollment, so those populations are mostly comprised of childless adults and custodial parents.

At least seven states—Kansas, Virginia, Maine, Ohio, Utah, Arizona, and Mississippi—have requested work requirements and are awaiting approval.

The Medicaid and CHIP Payment and Access Commission has advocated to halt the disenrollments for some time to come up with an improved version of the program. However, it is unlikely this will cause CMS or any states pursuing the policy to pull back.

Work requirement impact on population

Though the waivers have been approved by the federal agency for five states, only Arkansas has so far implemented them. Work requirements in Arkansas have resulted in an increasing number of people losing coverage. Arkansas implemented work requirements starting June 2018, and the state has reported declines in enrollment since then.

Arkansas has estimated more than 12,000 beneficiaries have lost coverage in the five months since work requirements went into effect. Due to Arkansas’ “private option” Medicaid expansion, the work requirements were not subject to the same regulations as in traditional Medicaid expansion states.

A quarter of eligible people lost Medicaid coverage in October 2018 due to noncompliance with Arkansas’ work requirements. According to the data released by Arkansas’ Department of Human Services, the state has seen a 12 percent decrease in enrollment in Arkansas Works between May 2018 and October 2018.

Impact on Medicaid expansion by ballot issue

Idaho, Utah, and Nebraska won approvals to expand Medicaid in the November 2018 midterm elections. This is a win for about 300,000 low-income people in the three states combined. The expansion of Medicaid in Utah increases the possibility of a work requirements waiver to move forward.

Work requirements have not yet been proposed in Idaho or Nebraska but both states might consider them as a condition of expansion.

In early 2018, Nebraska Gov. Pete Ricketts’ office had indicated it would not pursue work requirements because it would only impact a small slice of the state’s Medicaid population (NET article, Jan. 11, 2018). With the passage of Nebraska’s Medicaid expansion ballot issue in November, the state could revisit requirements in 2019 as a condition of expansion.

What’s next?

Kentucky was the first state to get approval from CMS as well as the first state to get the waiver blocked by a federal judge. A similar lawsuit has been filed to halt the work requirements in Arkansas.

Nonpartisan organization Medicaid and CHIP Payment and Access Commission called for a “pause” in work requirements to make the program more efficient. About 80 percent of eligible, non-exempt people did not report their hours of work in Arkansas. The work doesn’t end at implementing the waiver, awareness needs to be created among people as most do not fully understand the process of reporting the working hours.

Despite Medicaid expanding to more states, increased coverage to the needy is not guaranteed. Work requirements approved by CMS have raised a lot of political attention and debates regarding further implications. With more than seven states already seeking approvals to impose work requirements and CMS actively encouraging them, more state requests are likely to follow.

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