WASHINGTON (CN) - The Trump administration rolled out new policy guidance Thursday that would allow states for the first time to force Medicaid enrollees to work, a move that critics say could put the most vulnerable Americans at risk of losing their health coverage.
A 10-page letter sent to state Medicaid directors Thursday morning indicates that states would be allowed to sever Medicaid benefits for the unemployed, those not in school, and those not participating in varying forms of "community engagement," including job training, volunteer work and caregiving.
Children, the elderly, those with disabilities and pregnant women would be excluded from the work requirement, which would apply only to able-bodied adults.
Former President Obama’s federal healthcare law prevents states from imposing a work requirement on Medicaid eligibility, but the new policy guidance from the Centers for Medicare and Medicaid would allow states to apply for waivers to circumvent that restriction.
The Obama administration balked at such waiver requests, but the Trump administration's new policy would rely on section 1115 of the Social Security Act, which allows waivers of certain provisions of the law if states can convincingly show that an initiative is both a research project and would promote the program's objectives.
The Centers for Medicare and Medicaid says the policy will strengthen the program and give states more flexibility. That demand was a rallying cry for Republicans during their unsuccessful attempts last year to repeal “Obamacare.”
During a press call Thursday morning, CMS administrator Seema Verma echoed that sentiment in the agency's announcement of the new policy guidance, saying the policy responded to requests from states for more flexibility in how they administer the program.
According to Verma, 10 states so far have submitted applications for federal waivers to impose a work requirement: Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, North Carolina, Utah and Wisconsin.
Andrea Callow, associate director of Medicaid initiatives at nonprofit Families USA, sees the new policy as a shift in strategy by the Trump administration to undercut the Medicaid program after efforts to weaken it failed during attempts to repeal "Obamacare.”
Republican repeal proposals sought to switch Medicaid to a per capita cap or block grant structure, and would have ended the Medicaid expansion program, which critics said would reduce the number of Americans covered by Medicaid.
Rather than weaken Medicaid through legislative efforts, Callow says the Trump administration could now be attempting to achieve that goal administratively.
"Now we have this sort of administrative wave, kind of building on whatever momentum you have in public favor to dismantle the program administratively," Callow said in a phone interview.
According to Callow, the new policy chips away at the entitlement structure of the Medicaid program, which could result in vulnerable people losing their benefits, as well as a weakening of the program in Medicaid expansion states.
Callow says the new policy will especially affect those who fall into a gray area of disability - those who don’t get Medicaid disability benefits, but are still too sick to work.
“Those are the people who need Medicaid coverage the most, because the rely on it. They rely on it to stay healthy and to potentially even get back into the workforce,” Callow said.
MaryBeth Musumeci, associate director for the Kaiser Family Foundation’s Program on Medicaid and the Uninsured, said the processes states implement for enrollees to document and verify their compliance could be overly burdensome.
"Those who qualify for an exemption also must successfully document and verify their exempt status, which could be as often as monthly,” she said in an emailed statement. “There is a real risk of eligible people losing coverage due to their inability to navigate this process or miscommunication or other breakdowns in the administrative process.”
That could also strip coverage from disabled people eligible for Medicaid benefits.
“Only exempting individuals eligible ‘based on a disability’ leaves many people with disabilities at risk of losing coverage for which they remain eligible, if they cannot comply with the requirements, verify their compliance, or successfully document an exemption,” Musumeci said.
Welfare reform two decades ago entrenched the idea of a work requirement as the Temporary Assistance for Needy Families replaced the cash assistance welfare program. Later, a work requirement found its way into the Supplemental Nutrition Assistance Program, a revamp of what used to be called food stamps.
According to a Kaiser Family Foundation poll, public support for a work requirement for Medicaid is high.
The June poll shows that 70 percent of Americans would support the policy.
But according to Callow with Families USA, the new policy might not sustain court challenges.
"We believe that this guidance is illegal,” she said. “That there is no room in the Medicaid program for a work requirement, and that this is really just an attempt by the administration to push people off the Medicaid program and penalize them.”
In a statement, Families USA said it would support legal challenges to the new policy, but CMS administrator Verma said that section 1115 gives the agency broad authority to determine if a state program is likely to assist in supporting the objective of the Medicaid program.
To buffer attempts to block the policy in court, Verma said a growing body of evidence suggests that productive work and community engagement may improve health outcomes.
The Jan. 11 CMS letter contains citations to some of the studies Verma said support that assertion.
One study the letter cites shows that unemployment can lead to higher mortality rates, along with poorer overall general and mental health, including higher depression rates.
According to the Kaiser Family Foundation, Medicaid covers 20 percent of Americans, and 6 in 10 able-bodied adults currently enrolled in Medicaid work full or part-time.
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