Capitol Correspondence - 04.10.17

Kaiser Brief Examines Medicaid Work Requirements

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On March 23, the Kaiser Family Foundation released an issue brief titled, “Medicaid and Work Requirements.” The brief examines the proposals by states that have sought approval for mandatory or voluntary work programs as part of their Section 1115 Medicaid expansion waiver applications. To date, the Centers for Medicare and Medicaid Services (CMS) has not approved any such requests, but a letter sent from HHS Secretary Tom Price and CMS Administrator Seema Verma last month signaled that CMS is open to states implementing work requirements on Medicaid beneficiaries. (See WICs article, “HHS Letter Sets Forth Framework for Medicaid Cost-Sharing Provisions, Extension of HCBS Rule Implementation,” March 19, 2017.)
The issue brief looks at four states (AZ, IN, KY & PA) that have formally submitted waiver requests that would have required work as a condition of eligibility. Three of these states would have required a set number of hours engaged in work activity, while one would have only required a referral to a work search program. The brief also looks at three states (IN, MT, and NH) that contain a voluntary work program referral separate from their Medicaid expansion waivers. (It should be noted that work requirements have not been proposed for individuals with disabilities who receive Medicaid benefits.)
The brief asks several key policy questions, including whether work requirements result in more beneficiaries working, how many Medicaid adults are already working even absent a work requirement, and what effect administering a work requirement would have on states. The brief notes that currently around 60% of Medicaid beneficiaries do work, while the majority of those not working have an illness or disability. Some critics of work requirements argue that extending Medicaid benefits to non-disabled adults makes it easier for those individuals to seek employment as basic general health is necessary to obtain and retain employment. Additionally, critics note that work requirements necessitate administrative oversight, which has a cost attached that would partially undermine the economic benefit of requiring beneficiaries to work.