News & Politics

Feds Allow States to Impose Work Requirements on Medicaid Beneficiaries

The Centers for Medicare and Medicaid Services has issued a new rule that makes it possible for states to require Medicaid recipients to work, or undergo job training, in order to receive benefits.

At least 10 states had requested the rule change that will be voluntary and not affect all Medicaid recipients. States would have to come up with a program and submit it to Washington in order to receive a waiver.

But that didn’t stop Democrats from complaining that the change would make it more difficult for poor people to get health care.


Certain Medicaid recipients would be exempt from the rules, including those with disabilities, the elderly, children and pregnant women, the administration said. Verma also said states would have to make “reasonable modifications” for those battling opioid addiction and other substance-use disorders.

“This gives us a pathway to start approving waivers,” Verma said on a call with reporters. “This is about helping those individuals rise out of poverty.”

Under the 2010 Affordable Care Act, Obama’s signature domestic policy achievement commonly known as Obamacare, 31 states expanded Medicaid to those making up to 138 percent of the poverty level as defined by the federal government, adding millions of people to the rolls.

Republicans have repeatedly failed to repeal and replace Obamacare, a top Trump campaign promise. Instead, his administration has sought to weaken the program through executive orders and administrative rules.

Advocacy groups said most Medicaid recipients already have jobs, and those who do not may have difficulty accessing transportation to get to and from work or need to care for family members.

“This action by the Trump administration goes after people who are just trying to get by,” said Democratic U.S. Senator Ron Wyden of Oregon. “Healthcare is a right that shouldn’t be contingent on the ideological agendas of politicians.”

The federal government reimburses a portion of the money spent by states to provide Medicaid coverage for those who are eligible. Many Republicans opposed the enlargement of Medicaid eligibility authorized under Obamacare. Many Republican-governed states declined to take part in the expansion.

The Obama administration opposed state efforts to implement work requirements in Medicaid because it could result in fewer people having health insurance.

In 2013, the inspector general for the state of Illinois Department of Healthcare and Family Services reported that state workers were failing to verify eligibility of many Medicaid recipients. So the legislature hired an independent vendor to do the job for them.

What that vendor found was astonishing.

Illinois Policy:

Since January, the independent vendor has reviewed nearly 419,000 case files of individuals currently enrolled in Medicaid. Of those, the vendor identified more than 210,000 that were ineligible for benefits, which amounts to more than 50 percent of all cases reviewed so far. Another 47,000 cases reviewed so far this year were eligible for some benefits, but enrolled in the wrong program. For example, some individuals enrolled in Medicaid may only qualify for programs with greater cost-sharing. Overall, the review has yielded an eligibility error rate of more than 61 percent.

Medicaid has been on an unsustainable spending trajectory for a decade and the reason is that the program is fraught with fraud and abuse. The hope that a Medicaid beneficiary would be able to get a job and would be able to afford his own insurance or receive health insurance through his employer is the impetus for the waiver program.

Obama’s expansion of Medicaid in Obamacare only made the situation worse. In fact, there is plenty of anecdotal evidence that many of those who are eligible under the expanded Obamacare Medicaid program still don’t have access to doctors or hospitals because many physicians are not taking new Medicaid patients. A benefit does little good if it can’t be used, and for an unknown number of Medicaid recipients, that appears to be the case.

There will no doubt be many states that do not take advantage of this new program. But for those states that want to experiment with forcing some Medicaid recipients to work for their benefit, they will now have that opportunity.