WASHINGTON — Rewriting the rules on health care for the poor, the Trump administration said Thursday it will allow Wisconsin and other states to require “able-bodied” Medicaid recipients to work, a hotly debated first in the program’s half-century history.
Seema Verma, head of the Centers for Medicare and Medicaid Services, said requiring work or community involvement can make a positive difference in people’s lives and in their health. The goal is to help people move from public assistance into jobs that provide health insurance. “We see people moving off of Medicaid as a good outcome,” she said.
But advocates said work requirements will become one more hoop for low-income people to jump through, and many could be denied needed coverage because of technicalities and challenging new paperwork. Lawsuits are expected as individual states roll out work requirements.
“This is targeted at the lowest-income folks that we have out there, people who have difficult lives already,” said Bobby Peterson, executive director of ABC for Health, a nonprofit public interest law firm in Madison. “We’re just making it harder for them.”
“If you’re not healthy, it’s difficult to work,” said Mike Bare, research director for Community Advocates’ Public Policy Institute in Milwaukee. “Requiring you to work to get healthy — there’s something backwards there.”
Wisconsin is among 10 states seeking work requirements for Medicaid recipients. In June, Gov. Scott Walker asked President Donald Trump’s administration to let the state impose a four-year time limit on coverage for childless adults unless they work or train for a job. Wisconsin also wants to require drug screening.
The proposal “is about helping people transition from public assistance into Wisconsin’s workforce, where they can build a solid financial foundation for themselves and their families,” Walker said in June.
70 million clients
Medicaid, created in 1965 for families on welfare and low-income seniors, now covers more than 70 million people, or about one in five Americans. The federal-state collaboration has become the nation’s largest health insurance program.
Beneficiaries range from pregnant women and newborns to the elderly in nursing homes. Medicaid was expanded under former President Barack Obama, with an option allowing states to cover millions more low-income adults. Many of them have jobs that don’t provide health insurance.
People are not legally required to hold a job to be on Medicaid, but states traditionally can seek federal waivers to test new ideas for the program.
Verma stressed that the administration is providing an option for states to require work, not making it mandatory. Her agency spelled out safeguards that states should put in place to get federal approval for their waivers.
States can also require alternatives to work, including volunteering, caregiving, education, job training and even treatment for a substance abuse problem.
Besides Wisconsin, the other states that have applied for waivers involving work requirements or community involvement are: Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, North Carolina and Utah. Advocates for low-income people say they expect Kentucky’s waiver to be approved shortly.
In Kentucky, which expanded Medicaid, Republican state Sen. Damon Thayer said work requirements could lessen the program’s impact on the state budget. They also hearken back to the program’s original intent, he added, “as temporary assistance to try to help people get back on their feet, not a permanent subsidy for someone’s lifestyle, if they’re capable of working.”
‘Through the cracks’
But congressional Democrats and advocates said the Trump administration is moving in the wrong direction. “Health care is a right that shouldn’t be contingent on the ideological agendas of politicians,” said Sen. Ron Wyden of Oregon, the top Democrat on the Senate committee that oversees Medicaid.
“All of this on paper may sound reasonable, but if you think about the people who are affected, you can see people will fall through the cracks,” said Judy Solomon of the Center on Budget and Policy Priorities, which advocates for the poor.
The debate about work requirements doesn’t break neatly along liberal-conservative lines.
A poll last year from the nonpartisan Kaiser Family Foundation found that 70 percent of the public supported allowing states to require Medicaid recipients to work, even as most Americans opposed deep Medicaid cuts sought by congressional Republicans and the Trump administration.
Another Kaiser study found that most working-age adults on Medicaid are already employed. Nearly 60 percent work either full time or part time, mainly for employers that don’t offer health insurance.
Most who are not working report reasons such as illness, caring for a family member or going to school. Some Medicaid recipients say the coverage has enabled them to get healthy enough to return to work.
Guidance for states
Thursday’s administration guidance spells out safeguards that states should consider in seeking work requirements. These include:
- Exempting pregnant women, disabled people and the elderly.
- Taking into account hardships for people in areas with high unemployment, or for people caring for children or elderly relatives.
- Allowing people under treatment for substance abuse to have their care counted as “community engagement” for purposes of meeting a requirement.
The administration said states must fully comply with federal disability and civil rights laws to accommodate disabled people and prevent those who are medically frail from being denied coverage. States should try to align their Medicaid work requirements with similar conditions in other programs, such as food stamps and cash assistance.
The National Association of Medicaid Directors, a nonpartisan group representing state officials, said in a statement there’s no consensus on whether work requirements are the right approach.
“This is a very complex issue that will require thoughtful and nuanced approaches,” said the group.
Trump’s new direction can be reversed by a future administration. Although waivers can have lasting impact they don’t amount to a permanent change in the program. They’re considered “demonstration programs” to test ideas.
State Journal reporter David Wahlberg contributed to this report.