Are Work Requirements the Future of Medicaid?


Work requirements have been part of the eligibility guidelines for public assistance programs across the country for many years. When the Temporary Assistance for Needy Families (TANF) program was created in 1996, it was designed with the idea that promoting work would be at the program core. The Supplemental Nutrition Assistance Program (SNAP) that exists to provide nutritional resources to low income individuals is also intended to include work or community engagement requirements, though many states have applied for waivers to alter or suspend these regulations in times of great economic hardship. Medicaid, however, has never had work requirements as part of eligibility in the more than 50-year history of the program; something that is about to change.

In the last five years, a number of states have applied for waivers that would allow them to include work requirements as part of their Medicaid eligibility requirements. The Centers for Medicare and Medicaid Services (CMS) have denied each of these waivers because the policy of the Obama Administration was that work requirements were an unnecessary barrier to coverage for many low-income individuals. However, the new administration has made it clear that their policy is to support programs that encourage employment and independence. This drastic policy shift has given work requirement advocates reason to be optimistic that their program ideas can now become reality.

What Will Medicaid Work Requirements Look Like?

As no state currently has an implemented waiver program for Medicaid work requirements, there are no real-world examples to analyze when considering how a program will operate. However, the varied methods that states have used to implement the work requirements for other public assistance programs are probably the best examples of how a Medicaid program might function. In fact, Maine specifically stated in their waiver request that they want to implement work requirements, in part, to maintain consistency across all of their social services programs. Under their current SNAP and TANF program requirements, recipients who are physically able, and not responsible for the daily care of dependents, must fulfill a work obligation to maintain their program eligibility. This obligation can be met in a number of ways, including maintaining paid employment, participating in approved work training or job search programs, attending school, or completing approved community service. Kansas has a similar program that strictly enforces work requirements, but allows them to be met through a variety of methods. They have also implemented a strict enrollment ban period for individuals who are not in compliance and an innovative tracking system to follow employment and income trends for individuals who have left the programs.

While many states across the country are enforcing work requirements for programs such as TANF and SNAP, only a handful have requested waivers for Medicaid demonstrations that include work requirements. In addition to Maine; Arkansas, Arizona, Indiana, Kentucky,  New Hampshire, Utah, and Wisconsin have submitted waiver requests to CMS in the past several years. Some, like Utah, were originally denied and have not yet re-submitted their requests since the current administration announced their policy change. Arizona and Arkansas have both had waiver requests denied in the past, but are actually obligated by their respective state laws to regularly re-submit waiver requests that include work requirements. New Hampshire received preliminary approval for their Section 1115 Demonstration Waiver on November 2, 2017 and will be moving forward with the full review process. Kansas has proposed, but not yet requested a waiver, to include work requirements for non-disabled adults as part of their KanCare 2.0 plan that is intended to overhaul their current Medicaid program.

Why Implement Work Requirements?

The idea of implementing work requirements for Medicaid eligibility has many supporters, as well as many critics. Proponents of work requirements for all public assistance, including Medicaid, believe that by promoting work, social service programs can help beneficiaries develop skills and work towards self-sufficiency. Advocates also claim that work requirements are important for the wellbeing of recipients because they can provide them with a sense of accomplishment and a daily structure that would otherwise be difficult to obtain without working. The belief of those who promote work requirements is that by approaching a public assistance beneficiary as a whole person with long-term needs, instead of simply addressing their most immediate concerns, social service programs can assist individuals in climbing out of poverty. As opposed to just helping alleviate the symptoms of poverty.

Advocates of work requirements also consider them to be a potential way to control the ever-growing costs of managing Medicaid. Historically, the implementation of work requirements for other public assistance programs has resulted in a significant drop in enrollment among able bodied adults. This reduction in caseload has then either reduced the overall program costs or freed up valuable resources that can then be directed towards the most vulnerable populations.

The critics of implementing Medicaid work requirements argue that these proposed demonstrations are nothing more than a way to cut costs by denying coverage to those who need it. They also argue that properly managed health is a prerequisite to being able to maintain steady employment and so by denying individuals medical coverage, these programs are actually reducing an individual’s chances of achieving self-sufficiency through employment. Opponents of tying Medicaid eligibility to work requirements also reference the statistics that show that 80% of individuals on Medicaid live in a household with at least one working adult and nearly 60% of Medicaid recipients already maintain some type of employment themselves. Critics argue that since such a large portion of beneficiaries are already working, the time and resources required to enforce work requirements would be poorly spent on a small minority.

Criticisms notwithstanding, Medicaid work requirements will most likely be implemented in several states over the coming year or two. These demonstrations will necessitate changes in how Medicaid programs are managed and participant eligibility is tracked. These changes may also provide great opportunities to develop new methods and incorporate technology that will allow for the granular tracking of individual clients as well as providing the essential data for understanding program-wide trends. The success, or failure, of any new program, can only be truly understood through comprehensive data that is both reliable and readily available. Otherwise, there is no way of knowing if a program is achieving its designed results.

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