Capitol Correspondence - 01.16.18

CMS Issues Guidance on Medicaid Work Requirements

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The Administration is moving fast on the President’s plan to allow states to implement work requirements for certain non-elderly, non-disabled Medicaid recipients, with the Centers for Medicare and Medicaid Services (CMS) releasing guidance for states on how to do so the week of January 8, 2018. CMS’ guidance quickly followed the President’s initial work requirements announcement last week and is in line with the vision expressed by Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma, laid out before the holidays. This is the first time in the Medicaid program’s 52-year history that work requirements have been encouraged.

The full guidance letter issued this week by Director Brian Neale of the Centers for Medicaid and CHIP Services (CMCS) can be accessed here, but here are key highlights:

  • The letter notes that work supports and incentives in Medicaid have been successful in disability programs including employment supports for people with disabilities and programs like the Medicaid Buy-In program (see pages 2-3)
  • Work requirements cannot be applied to Medicaid recipients who are children, pregnant, elderly, medically frail or qualify for the program based on a disability.
  • “Reasonable modifications” must be made for individuals suffering from addiction to substances.
  • CMS leaves it to states to decide what work requirements suit their needs.
    • Potential requirements could include career planning, skills training, education, job search, caregiving, volunteer service.
    • CMS also supports states’ efforts to align Medicaid work requirements with SNAP or TANF work or work-related requirements.
  • CMS clarifies that the federal government will not match job training and other employment services, child care assistance, transportation, or other work supports to help beneficiaries prepare for work or increase their earnings. This reduces incentives for states to offer these services.
  • CMS explicitly states that budget neutrality still applies to 1115 waivers, meaning states are responsible for the administrative burden of implementing a work requirement program. Because these costs can be reduced if a state aligns its work requirements to TANF and SNAP, this increases state incentives to do so.
  • CMS also stipulates that states cannot accrue savings from loss in enrollment due to work requirements.

10 states applied for waivers to implement work requirements for Medicaid: Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, Mississippi, New Hampshire, Utah and Wisconsin.  CMS Administrator Seema Verma has made it clear that CMS would approve these requests. In fact, CMS approved Kentucky’s plan on Friday, January 12, 2018, and it is widely expected that Indiana’s plan will be approved very soon. Read the Kentucky approval letter here.

Democratic groups have announced that they will litigate the requirements as soon as a state plan is announced.

It is important to flag Politico Pro’s analysis that policy discussion of work requirements overshadowed the fact that some state work requirement waiver proposals also seek to limit the amount of time recipients can receive Medicaid unless they meet work or training requirements. There is precedent for this in food stamp programs, which the Administration is citing as a reason why states should align Medicaid work requirements with these programs requirements. However, Politico Pro flagged a report by the United States Department of Agriculture (USDA) mentioning that states struggle with the administrative burden of tracking how long recipients have been receiving benefits. In fact, the report finds that states request waivers from this tracking – this suggests there could be complications for states and recipients if time limits for eligibility are applied to Medicaid.

ANCOR is assessing the implications of this guidance for people with disabilities and providers, and will continue monitoring developments pending its analysis. Some national disability organizations have put out varying statements on the work requirement policy announcement and as to whether this new policy will harm some programs on which people with disabilities rely, or whether people with disabilities are adequately protected and whether the policy will support employment supports in general under the program.