A handful of states that are seeking Medicaid work requirement waivers, but have not expanded Medicaid eligibility under healthcare reform, may be fighting an uphill battle.

As of April 2019, Alabama, Mississippi, Oklahoma, South Dakota, and Tennessee have not expanded Medicaid and have work requirement waivers pending before the Centers for Medicare & Medicaid Services. Some of these waivers are likely to meet the same fate as Kansas’ request, which CMS denied in December 2018.

Caught in a Catch-22

Since Alabama, Kansas, Mississippi, Oklahoma, South Dakota, and Tennessee have not expanded Medicaid eligibility, the income limits for beneficiaries remain low and childless adults don’t receive Medicaid benefits.

If the waivers are approved, affected beneficiaries (mostly parents or caretaking relatives of children age 6 years and older) would likely make too much money—even in low-wage jobs—to remain eligible for Medicaid. The jobs may not even offer health insurance, and if insurance is offered, it could be too expensive for workers to obtain. While buying insurance through the exchange would seem to be an option, these beneficiaries would be caught in the Medicaid gap: they would make too much to qualify for Medicaid and too little to qualify for the Affordable Care Act’s subsidies and credits to purchase health insurance coverage through exchanges.

What are the income limits?

The 2019 income limits for these states range from 18 percent of the federal poverty limit in Alabama to 95 percent of the FPL in Tennessee. While states with higher income limits may fare better before CMS, getting the waiver approved could be difficult.

Kansas’ waiver would have imposed work requirements on parents with children age 6 and up who make less than 38 percent of the federal poverty level, or $8,105 annually for parents in a family of three. In Alabama, parents or caretaker relatives cannot make more than 18 percent FPL, which is $3,839 annually for a family of three. Mississippi’s income limit is 26 percent FPL, which is $5,545 annually for a family of three. Oklahoma’s income limit of 42 percent FPL equals $8,958; South Dakota’s 49 percent FPL is $10,451 annually for a family of three; and Tennessee’s limit is 95 percent FPL, or $20,263 for a family of three (based on a national survey conducted by Kaiser Family Foundation with the Georgetown University Center for Children and Families, 2019).

While the Trump administration is making good on its intent to give states flexibility to restrict eligibility, with the Kansas denial it seems that the administration sees the futility in these states’ waiver requests

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

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