Trump Administration Will Approve Work Requirements in Medicaid

Today, in a speech to the National Association of Medicaid Directors, CMS Administrator Seema Verma announced that the Trump Administration is approving Medicaid waivers that impose work requirements on adults. These requirements are a deplorable break with decades of Medicaid policy, a threat to the one in five Americans who depend on the Medicaid program, and an abuse of the Medicaid waiver authority. This decision is wrong both on legal and policy grounds.

Medicaid waivers are a backdoor way for Trump Administration to promote work requirement for Medicaid coverage that Congress rejected

One of the elements of the various Republican Affordable Care Act (ACA) “Repeal and Replace” bills this past summer and fall would have allowed states to impose a “work requirement” on adults with Medicaid. This would mean that, unless low-income people can demonstrate they are working a minimum number of hours per week, they would lose their health insurance.

With the failure of these ACA repeal bills to pass Congress, the Trump Administration is looking to bring work requirements to Medicaid by using Medicaid’s “waiver” authority.

Work requirements in Medicaid run counter to program’s goals

The executive branch Medicaid waiver authority as created by Congress is broad, but it is not unlimited.  Section 1115 of the Social Security Act states that a Medicaid waiver must be an “experimental, pilot or demonstration project that, in the judgment of the [Health and Human Services] Secretary is likely to assist in promoting the objectives of” the Medicaid program.

Medicaid is a program that was designed by Congress to give low-income people health insurance and improve their health. When I ran the CMS unit responsible for Medicaid waivers, we took the legal requirement to limit waivers to those that promote Medicaid objectives quite seriously, including when we allowed states to experiment with conservative approaches to health insurance.

When we made the difficult decision to approve waivers allowing some states to experiment with requiring low-income adults to pay premiums to receive Medicaid, we and our state partners agreed to carefully construct the demonstrations to test premiums as an alternative to co-payments that might work better for doctors and patients, or as a basis for giving Medicaid beneficiaries financial incentives to engage in healthy behaviors.  These are goals clearly tied to the Medicaid program’s core objective of getting low-income people very low-cost health coverage and keeping them healthy.

In Verma’s announcement, she stated that:
“Believing that community engagement requirements do not support or promote the objectives of Medicaid is a tragic example of the soft bigotry of low expectations consistently espoused by the prior administration.”

Not surprisingly, this statement was met with stunned silence in a room full of people who have spent years trying to get low-income people covered and with good access to medical care. But a waiver that withdraws poor people’s health insurance as a punishment doesn’t promote those core Medicaid objectives at all.

There is simply no way to spin a work requirement that kicks people off of Medicaid as promoting Medicaid’s purposes. Related: Six Reasons Work Requirements Are a Bad Idea for Medicaid.

Faced with this legal challenge—and Medicaid work requirements will certainly be challenged in the federal courts—the Trump Administration is trying to re-define those objectives in a sharply distorted way. CMS maintains a description of Medicaid objectives on the section 1115 demonstration page on its website.

The Administration has replaced the previous description with a new set of objectives that, amazingly, does not include providing health coverage for low income people. Instead, Medicaid’s purported objectives now include “upward mobility” and “greater independence”, code words for kicking low-income people off of Medicaid.

Today’s step also undoes decades of work to make Medicaid into a regular health insurance program rather than a welfare program. Medicaid is now one of the largest components of our country’s patchwork health insurance system.

Medicaid now covers about 70 million people of all ages on the basis of income. Unlike programs like SNAP (food stamps) and Temporary Assistance to Needy Families, beginning in the 1980s the United States has extended Medicaid to low-income citizens on the basis of income and without work requirements or time limits.

In our new economy, where many jobs don’t offer health coverage, Medicaid is more important than ever

Medicaid’s role as a safety net — providing health coverage to people who can’t afford to buy it on their own and whose employers don’t offer it — is more important than ever. The American model of employees getting health care through their jobs is eroding with the growth of part-time work and the “gig” economy. The old guarantee that getting a job equals health coverage is vanishing for many in America.

A critical U.S. health policy goal has been to destigmatize the Medicaid program. Federal law has also come to require that documentation and application requirements be kept simple to encourage enrollment and reduce the number of uninsured Americans.

Broadening Medicaid to be available to all low-income Americans was a critical plank of the Affordable Care Act, and defense of this “Medicaid expansion” was central to the defense of the ACA this summer and fall.

Today’s announcement on work requirements in Medicaid is an attack on both the Affordable Care Act and the Medicaid program as a whole. It is also an illegal distortion of the executive branch Medicaid waiver authority. For the sake of the tens of millions of Americans who depend on a strong Medicaid program and for the sake of the rule of law, we should hope the Federal courts put a stop to it.