The Trump administration issued instruction to states on Thursday that will permit them to constrain people to work or prepare for jobs in order to receive Medicaid for the first time in the half-century history of this fundamental piece of the nation’s social safety net.
The letter to state Medicaid directors opens the door for states to cut off Medicaid advantages to Americans unless they have a job, are in school, are a caretaker or volunteer, or participate in other accepted forms of “community engagement” — an idea that some states had broached over the past several years but that the Obama administration had constantly rebuffed.
The new policy appears as 10 states are already lined up, waiting for federal permission to impose work requirements on able-bodied adults in the program. Three other states are contemplating them. Health officials could approve the first waiver — possibly for Kentucky — as soon as Friday, according to two people with knowledge of the procedure.
The guidance represents a fundamental and much-disputed recalibration of the compact between the government and poor Americans for whom Medicaid coverage provides crucial approach to health care.
The idea of conditioning government advantages on “work activities” was cemented into welfare more than two decades ago, when a system of unlimited cash help was replaced by the Temporary Assistance for Needy Families, which has work requirements and time limits. The link between government assist and work later was continued to anti-hunger efforts through the Supplemental Nutrition Assistance Program, as food stamps are now called.
But most health policy experts, including a few noted traditional, have regarded the government insurance enabling millions of people to afford medical care as a right that should not hinge on individuals’ compliance with other rules.
Recent polls recommend that the president’s GOP constituency overwhelmingly supports the idea, with more than 80 % of Republicans favoring it, along with a smaller majority of Democrats.
Several congressional Democrats quickly condemned the new policy. Republican lawmakers were hugely silent.
The Trump administration has signaled from the outset that it wanted to set a more timid tone for Medicaid, a 1960s-era program that was part of Lyndon Johnson’s anti-poverty programs known as the Great Society. On the day in March when she was sworn in as administrator of the Centers for Medicare and Medicaid Services, Seema Verma dispatched a letter to governors encouraging “innovations that build on the human dignity that appears with training, employment and independence.”
While some conservatives pressed her agency to problem guidelines quickly, lawyers within the Health and Human Services and Justice departments jockeyed for time to construct a legal justification that could withstand court challenges.
The legal problem is that states must obtain federal permission to depart from Medicaid’s usual rules, utilizing a procedure known as “1115 waivers” for the section of the law under which the program exists. To qualify for a waiver, a state must give a convincing justification that its experiment would “further the objectives” of Medicaid.
Unlike the 1996 rewrite of welfare law, which easily mentions work as a goal, Medicaid’s law contains no such element, and critics contend rules that could deny people coverage contradict its objectives. To get around this, the 10-page letter argues that working promotes good health and repeatedly asserts that the change fits within the program’s objectives. The guidance cites research it says demonstrates that people who work tend to have higher incomes combined with longer life spans, while those who are unemployed are more prone to depression, “poorer general health” and even death.
“[A] growing body of evidence suggests that targeting certain health determinants, including productive work and community engagement, may improve health outcomes,” the letter says. “While high-quality health care is essential for an individual’s health and well-being, there are many other determinants of health.”
The critics are prepared to pounce on that rationale.
“This is going to go to court the minute the first approval comes out,” predicted Matt Salo, executive director of the National Association of Medicaid Directors, whose members reflect a spectrum of views about requiring work.
Once CMS gives one state permission, “we would be looking very, very closely to the legal options,” said Leonardo Cuello, health policy director at the National Health Law Program. “It’s not a good idea, and it’s illegal.”
Cuello said the argument that work promotes health is “totally contorted. . . It’s a small like saying that rain causes clouds. It’s more that people [with Medicaid] get care, which assists them be healthy and makes them capable to work.” In a letter Thursday to Brian Neale, the CMS deputy director who oversees Medicaid, the organization said the administration’s new policy “completely ignores the wealth of literature regarding the negative health consequences of work requirements” and was issued without any opportunity for public input.
Mary Beth Musucemi, associate director of the Kaiser Family Foundation’s Program on Medicaid and the Uninsured, said the new approach “will penalize personals by having them lose health coverage, rather than incentivize them, as a voluntary program with adequately funded supportive services necessary to overcome barriers would.”
Calling the new policy “unconscionable and illegal,” Eliot Fishman, senior health policy director at the liberal consumer health lobby Families USA, said in a statement: “Today’s announcement isn’t about work. It is about taking away health insurance from low-income people.”
In a CMS call with reporters Thursday morning, Verma countered, “This policy is about assisting people achieve the American Dream.” She quoted from a presidential speech Johnson gave a half-century ago, when he said that Medicaid’s aim “is not only to relieve the symptoms of hardship but cure it.”
Verma also said that any drop in Medicaid rolls as a result of work requirements would stem from people no longer requiring it. “We see people moving off of Medicaid as a good outcome,” she said.
The White House also cited a separate rationale. Asked at Thursday afternoon’s briefing whether people are taking advantage of the system, press secretary Sarah Huckabee Sanders replied: “I think there are certainly cases where that happens. . . . [T]hat’s an issue and something we want to be sure to address.”
The most recent federal figures show that Medicaid enrolls more than 68 million low-income Americans, including children, pregnant women, people with disabilities and the elderly. Under the Affordable Care Act, the program has expanded in more than 30 states to cover people with incomes of up to 138 percent of the federal poverty level.
In states that now choose to link Medicaid to work; the requirement would apply only to able-bodied adults, as defined by each state.
Sixty percent of Medicaid’s non-elderly adults already work, according to a recent analysis of census data by the Kaiser Family Foundation. Of those without a job, more than a third are ill or disabled, 30 % are caring for young children, and 15 % are in school, the analysis displays.
The CMS guidance gives states a great deal of flexibility to define their own exceptions to a work requirement, as well as what counts toward work. “Each state is different,” the letter says, and sSuch activities “include, but are not limited to, community service, caregiving, education, job training, and substance use disorder treatment.”
The guidance particulars only that pregnant women and “medically frail” people be exempt — though frailty is not defined — and that people with opioid addiction be either exempted or permitted to count time in drug treatment toward work activities. It also suggests that states take into account the local availability of jobs in creating requirements. People receiving TANF cash assistance or SNAP food advantages who meet those programs’ work requirements will be considered in compliance with Medicaid’s rules.
While states should assist people on Medicaid meet their requirements — for instance, by assisting them find child care, transportation or job training — they may not use any Medicaid funds to do so, the letter says.
In the states that adopt such requirements, critics say, the effect will spread far beyond the healthy adults who do not already comply. Those who have a job are in school or care for young children will need to document to their state’s Medicaid agency that they are in compliance — or risk losing their advantages.
Under Kentucky’s waiver application, for instance, people on Medicaid would be needed to report income changes within 10 days, noted Cara Stewart of the Kentucky Equal Justice Center. For low-wage workers, such as waitresses with fluctuating wages, “it boggles my mind,” Stewart said.
Before she became the CMS administrator, Verma was a health-care consultant who specialized in assisting states redesign their Medicaid programs. She was an architect of Kentucky’s waiver application once a Democratic governor who had eagerly embraced the ACA was succeeded by Matt Bevin, a Republican who campaigned on a pledge to reverse the program expansion there.
Verma also had a major role in designing an unorthodox approach to Medicaid in Indiana, which had asked the Obama administration to approve a work requirement. In the end, that state included in its Medicaid expansion only an encouragement of voluntary efforts by beneficiaries to train for work or find jobs. Indiana rewrote its waiver request last summer, this time asking for federal permission to compel work activities.
Verma has recused herself from ruling on those two states’ requests but has imported the ideas behind them into the new federal policy.