New policy to let states tie Medicaid to jobs
Benefits can be cut off if recipients fall short of conditions.
WASHINGTON — The Trump administration issued guidance to states early Thursday that will allow them to compel people to work or prepare for jobs in order to receive Medicaid for the first time in the half-century history of this pillar of the nation’s social safety net.
The letter to state Medicaid directors opens the door for states to cut off Medicaid benefits to Americans unless they have a job, are in school, are a caregiver, volunteer or participate in other approved forms of “community engagement” — an idea that some states had broached over the past several years but that the Obama administration had consistently rebuffed.
The new policy comes as 10 states are already lined up, waiting for federal permission to impose work requirements on able-bodied adults in the program. Three other states are contemplating them. Health officials could approve the first waiver — probably for Kentucky — as soon as Friday, according to two people with knowledge of the process.
The guidance represents a fundamental and much-disputed recalibration of the compact between the government and poor Americans for whom Medicaid coverage provides a crucial pathway to health care.
The idea of conditioning government benefits on “work activities” was cemented into welfare more than two decades ago, when a system of unlimited cash assistance was replaced by the Temporary Assistance for Needy Families with its work requirements and time limits. The link between government help and work later was extended to anti-hunger efforts through the Supplemental Nutrition Assistance Program, as food stamps are now called.
But most health policy experts, including a few noted conservatives, have regarded the government insurance enabling millions of people to afford medical care as a right that should not hinge on individuals’ compliance with other rules.
The Trump administration has signaled from the outset that it wanted to set a more conservative tone for Medicaid, a 1960s-era program that was part of Lyndon Johnson’s anti-poverty Great Society. On the day in March when she was sworn in as administrator of the Centers for Medicare and Medicaid Services, Seema Verma dispatched a letter to governors encouraging “innovations that build on the human dignity that comes with training, employment and independence.”
While some conservatives pressed her agency to quickly issue guidelines, lawyers within the Health and Human Services and Justice departments jockeyed for time to construct a legal justification that they hope can withstand court challenges.
The legal issue is that states must obtain federal permission to depart from Medicaid’s usual rules, using a process known as “1115 waivers” for the section of the law under which the program exists. To qualify for a waiver, a state must provide a convincing justification that its experiment would “further the objectives” of Medicaid.
Unlike the 1996 rewrite of welfare law, which explicitly mentions work as a goal, Medicaid’s law contains no such element, and critics contend rules that could deny people coverage contradict its objectives. To get around this, the 10-page letter argues that working promotes good health and repeatedly asserts that the change fits within the program’s objectives. The guidance cites research that it says demonstrates people who work tend to have higher incomes associated with longer life spans, while those who are unemployed are more prone to depression, “poorer general health,” and even death.
A “growing body of evidence suggests that targeting certain health determinants, including productive work and community engagement, may improve health outcomes” the letter says. “While high-quality health care is important for an individual’s health and well-being, there are many other determinants of health.”
The critics are prepared to pounce on that rationale.
“This is going to go to court the minute the first approval comes out,” predicted Matt Salo, executive director of the National Association of Medicaid Directors, whose members reflect a spectrum of views about requiring work.
Once CMS gives one state permission, “we would be looking very, very closely to the legal options,” said Leonardo Cuello, health policy director at the National Health Law Program. “It’s not a good idea, and it’s illegal.”