In early January, the Trump administration’s Center for Medicare and Medicaid Services (CMS) directed states to deny adults Medicaid coverage if they cannot document employment. In spite of all the rhetoric about work and self-sufficiency associated with this announcement, this new policy, rolled out in a letter to state Medicaid directors, has virtually nothing to do with helping low-income people get or keep jobs.
Rather, it is part of a backdoor strategy to accomplish through executive branch action what could not get done in Congress: to substantially roll back the Affordable Care Act’s (ACA) expansion of Medicaid and take health coverage away from millions of low-income adults.
The Trump Administration is attacking Medicaid through administrative channels
The ACA includes a lot of provisions that increase health insurance coverage, but the one that has had the largest coverage impact is the expansion of the state-federal Medicaid program to low-income adults, a group that most states previously excluded from Medicaid. The Medicaid expansion has extended health insurance to over 15 million adults in 32 states (including DC), with an additional state, Maine, recently passing the expansion by public referendum. Many of the adults who have gained health coverage through the Medicaid expansion work in low-wage or seasonal jobs that do not offer health insurance.
It is one of the most successful aspects of the ACA. It is supported by Democratic and many Republican governors and enjoys strong popular support. That support was a key reason last summer’s Republican health care bills failed, because ending the Medicaid expansion was integral to every Republican proposal.
So now, having lost the legislative fight, the Administration is turning its attention to attacking Medicaid through administrative channels. To do this, it is using a provision in Medicaid law that lets the federal government waive certain Medicaid requirements, at a state’s request, for “demonstration projects”. The law requires that the change the state is requesting “promote Medicaid objectives.”
Allowing work requirements counters the Medicaid’s central goal of covering more people
I oversaw federal review of Medicaid waivers from 2013 until the spring of 2017 at CMS. The Obama administration continued the understanding of previous administrations, both Democratic and Republican, that waivers must meet a legal requirement that they try to strengthen the Medicaid program: by expanding coverage, improving care delivery, or help safety net hospitals and other providers. But CMS’s recent announcement is directly opposed to the central Medicaid goal of covering low-income people. This is the first time in the 52-year history of the program that Medicaid waivers have been approved to reduce coverage instead of to expand it.
There is overwhelming evidence that the Administration’s actions, working with several conservative governors, are about taking coverage away from people rather than about supporting employment. In almost every state that has proposed a work requirement to this point, that requirement is paired with other major restrictions and barriers to Medicaid coverage. For example, Kentucky’s work requirement is linked to (among other barriers to coverage) a new “lockout” provision that will bar people from Medicaid for six months if they fail to report a change in income or if they fail to submit an annual redetermination of eligibility, a bureaucratic hurdle that itself could easily cut Medicaid coverage in that state by hundreds of thousands of people. Meanwhile the same proposals do not offer the kind of resources—most notably including child care—that would help people get and keep jobs.
The reduction ad absurdum exception to the rule that states proposing work requirements are also proposing to cut back Medicaid coverage in other ways is Mississippi, which proposes a stand-alone work requirement simply because it has nowhere else left to cut. Mississippi proposes to pair a work requirement with no ACA Medicaid expansion and the third-lowest Medicaid eligibility for parents of any state, $5,540.40 per year for a family of three. Currently, low-income parents who work in expansion states (as the great majority of enrollees do) don’t put their Medicaid coverage at risk if they make a modest salary. In contrast, the last thing an unemployed Mississippi parent would do who wants to keep Medicaid would be to get a job.
This is a back-channel tactic to shrink the Medicaid program
The Trump administration has openly opposed Medicaid expansion and Medicaid coverage of low-income adults more broadly. In a recent speech outlining planned approvals of work requirements, Trump Medicare and Medicaid chief Seema Verma stated directly that the ACA’s offer of Medicaid “to working-age, able-bodied adults does not make sense.”
Having failed to convince a Republican congressional majority to adopt that view, the Trump administration is now proposing to take Medicaid coverage away from millions of adults through waivers, an administrative back-channel. Work requirement waivers to cut back coverage for adults will almost certainly face legal challenge. Ultimately, as with other Trump administration efforts to evade constitutional and statutory limits on executive branch power, it will be up to the federal courts to intervene.