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Work Requirements for Medicaid Gain Popularity Among States

May 2, 2017

Medicaid provides coverage for healthcare services for individuals and families with incomes of up to 138% of the federal poverty level (FPL). The 2017 levels equate to $16,400 per year for individuals and $33,600 for a family of four.[1] But income levels alone won’t qualify people for benefits unless they comply with additional requirements, including working, as requested in waivers by some states.

Maine is one state currently going for work requirements. According to an article by Leslie Small in Fierce Healthcare, “Maine, one of a handful of states trying to implement work requirements for Medicaid recipients, is pointing to a similar approach in another public assistance program as evidence the policy can work. Under the Affordable Care Act, the federal government can grant states waivers to revamp their Medicaid programs. The Obama administration approved applications from states including Indiana, which requires Medicaid beneficiaries to pay a share of premiums, but denied others, including requests to add work requirements from New Hampshire, Ohio and Arizona. ”[2]

Even though work requirements were once denied under the Obama administration, the new administration under Trump seems to be open and is even encouraging governors to apply for conservative Medicaid reforms, including work requirements, according to Small’s article.[3]

Maine had already linked food stamps to working, and that policy “led to higher wages for the group, including those no longer in the food stamp program, the state concluded, based on state wage and employment records in the year after the work requirements began,” according to an article in the Wall Street Journal.[4] However, the article adds that “Maine’s approach is drawing criticism from advocates for the poor, who say jobs, volunteer positions and transportation to either of them can be hard to come by in rural pockets with persistent unemployment.”[5]

 

States Expanding in 2017

A total of 32 states have currently expanded Medicaid coverage, with 19 states not expanded. Seven states are extending the flexibility currently allowed by law, according to the Kaiser Family Foundation. Kaiser reports that as of March 2017, Arizona, Arkansas, Iowa, Indiana, Michigan, Montana and New Hampshire “have approved Section 1115 waivers to implement the Affordable Care Act’s (ACA) Medicaid expansion in ways that extend beyond the flexibility provided by the law.”[6].

 

Traditional Expansion vs. Waivers

Created in 1965, Medicaid is a joint state-federal program with the federal government picking up an average of almost 60% of the dollars spent. Medicaid is the single largest item in states’ budgets, even more than elementary and high school education. The ACA resulted in 12.3 million new individuals enrolled in Medicaid between 2013 and 2015. This expansion put even greater pressure on already strapped state budgets. So, to encourage participation in the expansion to financially-strapped states, the federal government offered to pick up 100% of the cost of “newly-eligible” Medicaid participants for three years and up to 90% of the costs after 2020. However, the federal government tied their carrot to a giant stick. Any state that refused to expand would not only be ineligible for the new Medicaid funding, but would lose all Medicaid funding.[7]

Most states expanded under the existing rules. However, a small number of states obtained Section 1115 waiver approvals to implement the Medicaid expansion in ways that extended beyond the existing Medicaid rules.  Section 1115 waivers were “intended to allow for ‘experimental, pilot, or demonstration projects’ that, in the view of the HHS Secretary, ‘promote the objectives’ of the Medicaid program. 42 U.S.C. § 1315(a).[8]

As more states decide to expand Medicaid with waivers, it will be interesting to see how many choose work requirements.

 

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[1] “2017 Federal Poverty Level Chart,” https://obamacare.net/2017-federal-poverty-level/
[2] Leslie Small, “Maine points to results from revised food stamp policy to push for Medicaid work requirements,” Fierce Healthcare, http://www.fiercehealthcare.com/cms-chip/maine-points-to-food-stamp-policy-to-push-for-medicaid-work-requirements
[3] Ibid.

[4] Jennifer Levitz, “After Linking Work to Food Stamps, Maine Seeks Same with Medicaid,” Wall Street Journal, Apr. 14, 2017,  https://www.wsj.com/articles/after-linking-work-to-food-stamps-maine-seeks-same-with-medicaid-1492162202

[5] Ibid.

[6] MaryBeth Musemeci, Elizabeth Hinton, Robin Rudowitz, “Key Themes in Section 1115 Medicaid Expansion Waivers,” The Henry J. Kaiser Family Foundation, http://kff.org/medicaid/issue-brief/key-themes-in-section-1115-medicaid-expansion-waivers/

[7] “Medicaid’s Expansion under the Patient Protections and Affordable Care Act,” Americans for Prosperity Foundation, 2016, https://l540h40zt9y26qsqx2i31xx1-wpengine.netdna-ssl.com/wp-content/uploads/2016/10/NTK-MedicaidExpansion.pdf

[8] Robin Rudowitz and MaryBeth Musemeci, “The ACA and Medicaid Expansion Waivers,” The Henry J. Kaiser Family Foundation http://kff.org/report-section/the-aca-and-medicaid-expansion-waivers-issue-brief/#endnote_link_170581-2