Medicaid Work Requirements May Be Gone For Good

It appears major changes may be coming to Medicaid, which insures around 70 million Americans and provides health coverage for low-income adults, people with disabilities and some children.

The Trump administration supported work or volunteer hours as a requirement for health coverage. The move was spearheaded by Seema Verma, then-director of the Centers for Medicare and Medicaid Services.

Now, this is changing. In February, the Biden administration told states with work requirements that these programs are under review.

“It certainly seems like CMS has taken a position that the work requirements do not fulfill the objectives of the Medicaid act,” says Adam Mueller, advocacy director for Indiana Legal Services. His organization is part of a lawsuit seeking to block Indiana’s work requirement.

Federal law allows states to expand their Medicaid programs to cover more people. With permission from the Centers for Medicare and Medicaid Services, states also can experiment and customize their programs.

This is how 12 states got approval to implement work requirements.

Mueller says many people will lose coverage under a work requirement, for reasons like not filling out paperwork. In Arkansas, the only state where a work requirement was truly implemented, an estimated 70,000 people lost coverage.

“If you were to look at an experiment, you know, mid-experiment and say, ‘Oh, my gosh, this experiment is really, really hurting people.’ You would stop it,” Mueller says.

Some states that did expand Medicaid included conditions to appeal to conservative values. Like work requirements, or cost-sharing, where recipients have to contribute financially for their care -- even if it’s as little as a dollar per month.

So far, work requirements have largely been held up in the courts.

“You can't just unwind them in one day. They're ... each different,” says Joan Alker, executive director of the Center for Children and Families at Georgetown University.

In letters to state officials, the Biden administration made it clear Medicaid work requirements aren’t appropriate during the pandemic. Some healthcare experts speculate the administration would have begun to roll back these programs regardless.

Alker summarizes Biden’s position this way: “In essence, given COVID, given that we're an emergency, this is not a good time to be pursuing this policy. And now we’re going to be considering [state programs] one by one.”

Alker says even for conservative politicians, arguing against Medicaid isn’t the popular talking point it once was.

“I think the political calculation has changed during the pandemic," Alker says.

Some more conservative states have moved to broaden benefits. In Missouri, residents narrowly voted in 2020 to expand Medicaid.

But recently in Arkansas, in light of the possible removal of work requirements, politicians have threatened to roll back their expansion.

President Biden’s massive COVID aid package offers states more federal money if they expand Medicaid. It’s unclear if this will persuade state leaders to broaden their programs.

And some healthcare experts are wondering if states that haven’t expanded Medicaid -- like Wisconsin, Texas and North Carolina -- will be turned off by losing flexibility in the program.

“Many states did a Medicaid expansion under the Obama administration,”says Nina Schaefer, a senior research fellow with the Heritage Foundation, a conservative think-tank. "Indiana is an example that did the expansion but received a lot of policy waivers to get them there.”

That allowed Indiana to experiment with its Medicaid program and helped expansion gain support from then-Gov. Mike Pence.

As the Biden administration reviews state Medicaid programs, Schaefer is watching closely. She says it might be just the initial step in limiting state control.

“It's unclear to me whether the work requirement is really just the tip of the iceberg,” Schaefer says. "And we will begin to see them trying to claw back other flexibilities that not only the Trump administration gave, but perhaps even the Obama administration gave the states.”

So far, Indiana hasn’t signaled any intention to roll back expanded benefits. In a letter to federal officials, state Medicaid Director Allison Taylor wrote that the work requirement was designed so it could be removed from the expansion without disruption.

“We agree that implementation of Gateway to Work would not be appropriate during the pandemic or the period of recovery that is to follow,” Taylor wrote. “We may revisit and recalibrate Gateway to Work requirements when the recovery period concludes, but not a moment sooner.”

This story was produced by Side Effects Public Media, a news collaborative covering public health.