Conservative lawmakers have long stated their desire for Medicaid beneficiaries to have some “skin in the game,” wanting beneficiaries to work or volunteer, pay premiums, and comply with certain rules. And the expansion of Medicaid eligibility under the Affordable Care Act raised the ire of many who think that extending coverage to “non-disabled working-age adults without dependent children” goes against the mission of Medicaid.

While former President Barack Obama’s administration saw Medicaid as a means to increase access to healthcare, President Donald Trump’s administration seems to see the program as a welfare benefit that people are unduly taking advantage of and should work for, literally.

Although Republican lawmakers have thus far failed in their attempts to repeal and replace the Affordable Care Act, repeal would have also included changes to Medicaid, the Centers for Medicare & Medicaid Services is working to bring about fundamental changes to the Medicaid program in another way.

In March 2017, CMS and the Department of Health and Human Services sent a letter to governors stating that the agency would use Section 1115 waivers as a way for states to usher in work requirements for able-bodied, adult Medicaid beneficiaries. CMS Administrator Seema Verma reiterated this in a speech to the National Association of Medicaid Directors in November 2017.

Although I once heard a panel of Medicaid directors say a Medicaid work requirement would require congressional action, the issue might just come down to the judgment of the Health and Human Services secretary.

“Under federal law, the Health and Human Services secretary’s Section 1115 waiver authority is limited to approving demonstrations that, in the secretary’s judgment, are ‘likely to assist in promoting the objectives‘ of the Medicaid program,” according to a recent Kaiser Family Foundation report (Kaiser Family Foundation: Medicaid and Work Requirements, May 23, 2017).

As of January 2017, 77 million people were enrolled in Medicaid (Decision Resources Group data).

Work requirements would likely produce little savings in the Medicaid program and have limited effect, since 59 percent of Medicaid beneficiaries are employed full or part-time in low-income jobs such as agriculture, retail, and hospitality (Decision Resources Group National Medicaid Analyzer) These jobs often do not include health benefits, and if they do, the wages paid place health benefits, when weighed against other necessities such as rent and food, out of reach.

Eight states with Republican governors, Arizona, Arkansas, Indiana, Kentucky, Maine, New Hampshire, Utah, and Wisconsin, have applied for Medicaid waivers that include a work requirement. In October 2017, Pennsylvania Gov. Tom Wolf, a Democrat, vetoed a bill that included a Medicaid work requirement. The actions of these governors are a signal that Medicaid work requirements could become a partisan issue, much like Medicaid expansion when it was first introduced.

Joyce Caruthers is a senior analyst for Decision Resources Group. Follow her on Twitter @JCaruthersDRG.

About Health Plan Analysis

DRG’s Health Plan Analysis explores pharmacy benefit, provider contracting, and product trends through actionable industry insight and key enrollment data across the United States, including Commercial, Exchanges, Medicare, and Medicaid markets. Find out more: Health Plan Analysis.

About Managed Markets Surveyor

DRG’s Managed Market Surveyor delivers benefit enrollment data by managed care organization and at multiple geographic levels to better inform strategic planning and resource allocation. Find out more: MMS and MMS-Rx.

About Market Overviews

DRG’s Market Overview reports provide expert analysis of key healthcare players and market drivers in the 87 most dynamic US metro areas. Find out more: Market Overviews.


A Look Ahead: Medical Aesthetics Market Recovery in 2021 and Beyond

View Now