What Are the New Work Requirements for Medicaid?

How will they affect you?

medicaid on application
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Medicaid was created alongside Medicare in 1965. While Medicare was intended to offer affordable health care for seniors, the goal of Medicaid was to provide care for people who could not otherwise afford it—those with low incomes, with disabilities, or both. Some people may even be eligible for both programs.

Medicaid has undergone changes over the years, most notably with the Affordable Care Act in 2010, more commonly known as Obamacare.

Starting in 2014, states had the choice to accept additional federal funding in the short-term through 2020 to pursue Medicaid expansion. Now, it seems ever more sweeping changes may come to pass.

On January 11, 2018, the Centers for Medicare and Medicaid Services, under CMS head Seema Vera, has encouraged states to design pilot programs that impose work or job training requirements on Medicaid recipients. The goal, she claims, is to improve the quality of life for people on Medicaid. States can make their proposals through waivers, but they must then get federal approval.

The issue is far more complex than CMS leads you to believe.

Work and Wellness

In all likelihood, the issue is less about health and wellbeing than about dollars and cents. After all, the Trump administration did try to cut hundreds of millions of dollars from Medicaid in 2017 with the failed American Health Care Act/Better Care Reconciliation Act.

Instead of matching spending with the states, the law would have used block grants or per capita limits to fund Medicaid programs. Most states would be unable to make up for the shortfall and would need to reduce benefits, create waiting lists, require people to pay for coverage, or impose other cost-cutting changes.

Republicans have made it clear that they intend to reform Medicaid in 2018. Work requirements are the first step towards that goal. These requirements are expected to reduce the number of people eligible for Medicaid and to decrease overall enrollment in the program. The overall effect would be to decrease Medicaid spending and to shift care towards employer-sponsored health plans.

There have been no studies to show that working in and of itself improves quality of life. To the contrary, there are studies that show that Medicaid expansion has improved both health outcomes and community involvement.

A 2015 study in the journal PLoS One compared more than 16,000 low-income adults in states with and without Medicaid expansion. The researchers found that not only were low-income individuals more likely to be black or rural residents, but they were also more likely to have better health outcomes if they lived in states that had Medicaid expansion.

When it comes to community involvement, states with Medicaid expansion have shown an increase in volunteerism from their Medicaid recipients. This is shown in a 2017 study in the journal Socius. Whether volunteering was formal through an organization or informal within neighborhoods, rates were notably increased, especially within minority groups.

Able-Bodied Americans and Medicaid Work Requirements

In 2016, 72.2 million people were enrolled in the program. Generally speaking, the majority of Medicaid recipients are children. Once children, the elderly, and people on Supplemental Security Income (SSI) are excluded, 24.6 million adults remain.

Of that group, 60 percent (14.8 million) are working—42 percent full time (at least 35 hours per week) and 18 percent part-time. Of those not working (9.8 million), 14 percent have an illness or disability, 12 percent are involved in caregiving, 6 percent are in school, and 7 percent are not working for other reasons.

CMS specifically states that work requirements should only be considered for able-bodied candidates, but they don't define what that means.

People who qualify for Social Security Disability Insurance (SSDI) also qualify for Medicaid. However, having a disability recognized by these programs is not always easy. The criteria are strict and the majority of cases are denied. In 2010, only 34.8 percent of 2,838,485 applications were approved, down from 56.1 percent in 2000. In fact, the number of approvals has decreased annually since 2005. That leaves a lot of people with impairments without a defined disability.

Each state will need to set its own guidelines for what it deems to be "able-bodied". For example, Kentucky, the first and only state to have a work requirement waiver approved, recognizes people with cancer, blood-clotting disorders, or alcohol or substance abuse disorder as "medically frail."

Satisfying the Medicaid Work Requirement

As to the work requirements themselves, Kentucky and nine other states have applied for waivers. Arkansas, Kentucky, and Wisconsin require 80 hours of work per month; Indiana up to 20 hours per week; Arizona, Maine, and Mississippi 20 hours of work per week; Kansas and New Hampshire 20 to 30 hours per week; and Utah three consecutive months of job search/training unless they are working 30 hours per week.

What constitutes "work" also varies by state. Activities range from employment to volunteerism. This is the breakdown according to each state's most current Medicaid waiver application.

  • Caregiving for a non-dependent person with a disabling medical condition — Kentucky
  • Drug treatment — Kentucky
  • Education — Arkansas, Arizona, Indiana, Kansas, Kentucky, Maine, New Hampshire
  • Employment — Arkansas, Arizona, Indiana, Kansas, Kentucky, Maine, Mississippi, New Hampshire, Utah, Wisconsin
  • Job search — Arkansas, Arizona, Indiana, Kansas, Kentucky, Maine, New Hampshire, Utah
  • Job training — Arkansas, Indiana, Kansas, Kentucky, Mississippi, New Hampshire, Utah, Wisconsin
  • Volunteering — Arkansas, Arizona, Indiana, Kansas, Kentucky, Maine, Mississippi

Exemptions From Medicaid Work Requirements

Not everyone will be faced with a Medicaid work requirement. Each state that applies for a waiver specifies who is exempt from the requirement. For each exemption category, a state may require that different criteria be met.

The most common exemption is age. All states excuse anyone 65 years and older from these work requirements. Some states allow more flexibility. Arkansas and Wisconsin exempt people 50 years and younger; Arizona 55 years and younger; and Indiana and Utah 60 years and younger.

Caring for children 6 years and younger or for a dependent disabled child or adult generally makes one exempt as well. Some states may extend this to older children and even foster care. In Kentucky, only one person per household is exempt if they care for a dependent minor or an adult with disabilities.

Although hours spent in drug treatment meets the work requirement in Kentucky, it is considered an exemption in Arkansas, Indiana, Maine, Mississippi, New Hampshire, Utah, and Wisconsin. Students are also excluded from the requirement. However, the age of the student and the number of hours of school attendance may come into play. Being on unemployment compensation could make you exempt in Maine, Utah, and Wisconsin but not in the other states that have applied for waivers.

Interestingly, Kentucky has added a new alternative for people who do not otherwise meet the work requirement, a health and financial literacy course. The addition has raised concerns. It may unfairly challenge people who are not fluent in written or spoken language. It may also be difficult for people to complete if they have not completed a primary education.

The Debate on Medicaid Work Requirements

Those who support Medicaid work requirements emphasize how it will save money for the states. Contrary to the GOP's opposition to the Affordable Care Act, these work requirements may have the unintended consequence of strengthening it. As of Jan. 2018, only 33 states, including the District of Columbia, had pursued Medicaid expansion. Looking towards work requirements as a means to decrease program costs, more states—Idaho, Kansas, North Carolina, Utah, Virginia, and Wyoming—are now looking to expand.

While Kentucky is expected to save $2.4 billion in Medicaid expenses over five years with their proposal, it is expected that 95,000 people will lose their health coverage. A class action suit was filed in a federal court on Jan. 24 by 16 Kentucky Medicaid recipients. They claim the work requirements change the intended purpose of Medicaid which is to provide health care for the poor.

There may be suits in other states if the federal government approves other Medicaid waivers. The results of a lawsuit could affect the future of Medicaid. A win could make it harder for the current administration to proceed with Medicaid reform while a loss could allow for more changes to the program in the near future.

A Word From Verywell

Medicaid is about to undergo some major changes. Starting in 2018, states can apply to add work requirements to their Medicaid programs. To date, ten states have applied and the first state, Kentucky, has been approved with the first enrollment changes to take place in July.

While some people may be exempt from these work requirements based on age, caregiving, disability, or for being an active student, many won't. Whether or not you are for or against Medicaid work requirements, more states may choose to expand Medicaid as a result.

Sources:

Han X, Nguyen BT, Drope J, Jemal A. Health-Related Outcomes among the Poor: Medicaid Expansion vs. Non-Expansion PLoS One. 2015 Dec 31;10(12):e0144429. doi:10.1371/journal.pone.0144429.

Mager-Mardeusz H, Lenz C, Kominski GF. A "Cap" on Medicaid: How Block Grants, Per Capita Caps, and Capped Allotments Might Fundamentally Change the Safety Net. Policy Brief UCLA Cent Health Policy Res. 2017 Apr;(PB2017-2):1 10. http://healthpolicy.ucla.edu/publications/Documents/PDF/2017/363%20Medicaid_PB.pdf

Musumeci M, Garfield R, Rudowitz R. Medicaid and Work Requirements: New Guidance, State Waiver Details and Key Issues. The Henry J. Kaiser Family Foundation. https://www.kff.org/medicaid/issue-brief/medicaid-and-work-requirements-new-guidance-state-waiver-details-and-key-issues/. Published January 16, 2018.

SMD: 18-002, Opportunities to Promote Work and Community Engagement Among Medicaid Beneficiaries. Centers for Medicare and Medicaid Services. https://www.medicaid.gov/federal-policy-guidance/downloads/smd18002.pdf. Published January 11, 2018.

Sohn H, Timmermans S. Social Effects of Health Care Reform: Medicaid Expansion under the Affordable Care Act and Changes in Volunteering. Socius. 2017 Jan-Dec 3. doi: 10.1177/2378023117700903. Epub March 24, 2017.