Behavioral health advocates fear Medicaid work rules will harm access
The New Life Day Center, a homeless shelter in Lexington, Ky., is expecting a flood of people to offer their services as volunteers. But Debbie Farinelli, the coordinator for the center’s volunteers, isn’t looking forward to the looming glut of free labor.
The CMS has approved Kentucky’s waiver to require Medicaid beneficiaries to spend at least 80 hours a month in community service, employment or education. The demonstration will begin later this year and runs until Sept. 30, 2023.
Clients of the Lexington shelter— many of whom are on the state’s expanded Medicaid program and have substance abuse and/or mental health disorders—will have to demonstrate they are complying with the work requirement or else lose their coverage. Given this population’s myriad challenges in finding paid jobs, it’s expected many will seek volunteer positions.
“I have trouble getting reliable volunteers who want to be there,” Farinelli said. “If people are doing it just to get health insurance, you aren’t going to get qualified volunteers, and finding work for them to do and figuring out who’s going to supervise them will be very tricky.”
Along with approving Kentucky’s waiver, the CMS spelled out criteria for states to follow when petitioning the agency to add work requirements for Medicaid beneficiaries. Among other things, states will have to exempt people who are “medically frail” and make accommodations to allow people with substance abuse disorders to keep their coverage. There is no explicit exemption for people with mental health conditions.
There is particular con- cern about access to substance abuse and mental health treatment, even though the CMS said it will require states to make accommodations for people with addiction disorders because of the national opioid epidemic.
Complicating matters for providers and patients is that the CMS will allow each state to establish its own rules and definitions for applying the work requirement to people with substance abuse, mental illness and other health conditions.
Besides Kentucky, nine other states are seeking to impose a work requirement—Arizona, Arkansas, Indiana, Kansas, Maine, New Hampshire, North Carolina, Utah and Wisconsin. Five of those 10 states expanded Medicaid to cover low-income adults, increasing treatment access for tens of thousands of people with behavioral healthcare needs.
Kentucky officials project that about 95,000 fewer people will be on Medicaid in five years as a result of the work requirements and other changes, including premium payments and new income-reporting rules. Nearly 500,000 low-income adults have gained Medicaid coverage under Kentucky’s expansion.
“It is extremely likely that many people with behavioral health conditions could be significantly harmed,” said Hannah Katch, a Medicaid expert at the liberal-leaning Center on Budget and Policy Priorities.
On the other hand, the Kentucky model could open up more residential treatment beds for people with substance abuse, because it modifies a long-standing federal rule by allowing
the state to pay for care in facilities with more than 16 beds.
“It’s a very positive thing for increasing access in Kentucky, which is why I supported the waiver,” said Tim Robinson, founder and CEO of Addiction Recovery Care, which runs 13 substance abuse treatment centers that mostly serve Medicaid beneficiaries.
Still, Robinson is concerned about how the state will implement the work requirement, including the process for exempting the medically frail. He said expanded Medicaid coverage has been a big help in increasing access to addiction treatment, adding, “I’m hopeful that process won’t be cumbersome, but that’s yet to be seen. We can’t get someone back to work if we don’t treat them first.”
The Kentucky Hospital Association also had a hopeful take. Senior Vice President Nancy Galvagni said that while the association doesn’t know all the final details, the waiver has provisions to expand access to substance abuse treatment and exempt people who can’t work, such as those with addiction problems.
“There are a number of positive things with this waiver, particularly around behavioral health,” she said.
An estimated 30% of adults who have received coverage under the Affordable Care Act’s Medicaid expansion have a serious mental illness and/or substance abuse problem, and about 1.3 million people have received treatment for those disorders through that coverage, according to the National Council for Behavioral Health. From 20% to 34% of expansion enrollees in four states received either substance abuse or men- tal health treatment in 2014.
It’s estimated that 55,000 Kentuckians last year received substance abuse treatment through Medicaid.
The office of Kentucky Gov. Matt Bevin, a Republican who strongly pushed for the Medicaid work requirement, did not respond to a request for comment. After the waiver was approved, Bevin said: “Why should a working-age person not be expected to do something in exchange for what they are provided?”
Bevin also issued an executive order directing state agencies to end Medicaid expansion if the waiver is struck down by the courts.
Under the new CMS policy, states will have to take steps to ensure that people with substance abuse disorders have access to appropriate Medicaid coverage and treatment services. The guidance document says states may count time spent in treatment toward an individual’s work/community engagement requirement, or else exempt individuals participating in intensive substance abuse treatment from the work requirement.
In its Jan. 12 approval letter, the CMS said the Kentucky waiver program will include a substance use disorder program available to all Medicaid beneficiaries that will improve health outcomes. In its Jan. 11 policy statement, the CMS said all states seeking to impose work requirements should identify strategies to support people with such disorders in obtaining access to treatment.
But people with substance abuse disorders often face long waits to get into treatment. And the number of hours and duration of treatment may not be enough to enable people to meet and maintain the 80-hour per month community engagement requirement, Katch said. “This policy could take coverage away from someone seeking treatment who hasn’t been able to find it.”
Nationally, nearly 60% of nondisabled adults on Medicaid already work at least part-time, according to a study last year by the Kaiser Family Foundation. Of the rest, nearly 90% were sick or had a disability, were taking care of a family member or were in school, while another 8% said they
“The only fallback is to let them volunteer. But, good Lord, you’ve got to have a car to volunteer. You can’t just say; I’ll take my Volvo down to the homeless shelter and work.”
Robert Walker
Drug policy researcher University of Kentucky’s Center on Drug and Alcohol Research
couldn’t find a job.
People with substance abuse or mental health disorders have unique challenges in finding and holding paid or volunteer jobs, including a higher likelihood of having a criminal conviction on their record.
“If you have a felony conviction, you almost can’t get a job,” said Robert Walker, a drug policy researcher at the University of Kentucky’s Center on Drug and Alcohol Research. “The only fallback is to let them volunteer. But, good Lord, you’ve got to have a car to volunteer. You can’t just say; I’ll take my Volvo down to the homeless shelter and work.”
“It’s a game of chutes and ladders that may be difficult for some people to play,” said Rich Seckel, director of the Kentucky Equal Justice Center, who opposes the work requirement.
Farinelli envisions many other problems that people with substance abuse and mental health disorders will face in getting and keeping Medicaid coverage under the new rules.
For instance, they’ll have to comply with complicated new rules for reporting changes in income and job status, or else risk losing their coverage for six months. Homeless people with chaotic lives and no mailing address, access to a computer or checking account are at high risk of losing their coverage because of a reporting lapse, she warned.
In addition, Kentucky has not established a strong program for placing people in employment, job training or volunteer positions, even though beneficiaries of Temporary Assistance for Needy Families and the Supplemental Nutrition Assistance Program already are required to meet community engagement requirements, Walker said.
Farinelli herself is on Medicaid because her homeless shelter job doesn’t pay much. She found it confusing and complicated to get on Medicaid to begin with, needing help from an enrollment outreach counselor. Now she worries about whether she will consistently have enough work and volunteer hours to meet the 80-hour per month requirement.
“I’m nervous about whether my coverage will continue,” she said. “They’re trying to make it look like a bunch of lazy people collecting Medicaid. It isn’t.”