States can impose a work requirement on some Medicaid recipients, the Trump administration said Thursday, announcing major changes that could push able-bodied people learn new skills or take jobs to get off the government dole.
The policy is voluntary, with states interested in the changes asked to submit proposals for how they would push beneficiaries toward work.
The Centers for Medicare and Medicaid Services said it would not accept any plans that affected people with disabilities or others suffering hardships, saying the goal is not punishment but rather to entice those who could be working to get back into the job market.
“State and local officials know much better than the federal government how best to care for their citizens in need,” said CMS Administrator Seema Verma.
President Trump’s opponents, though, threatened to challenge the policy in court, and Democrats on Capitol Hill said pushing people to work could backfire since many Medicaid recipients already work and might fumble their paperwork when new rules take effect.
“By allowing states to impose harmful work requirements, the Trump administration is endangering the life support systems millions of vulnerable Americans rely on every day,” said Rep. Frank Pallone of New Jersey, the top Democrat on the House Energy and Commerce Committee.
Critics also doubted the Trump administration’s assurances that people with disabilities would be spared, and said yanking their health care would make it even harder for them to find work, especially in physically demanding jobs.
The Trump administration said people who work are actually healthier. One 2006 study found that going back to work can even “reverse the negative health effects of unemployment,” CMS said.
Opponents said the administration had it backwards, saying healthier people are able to work, not that working people are healthier.
Experts said it’s difficult to referee such a “chicken-and-egg” dispute — though they said using a stick approach to push people to work, rather than a carrot approach, might backfire.
“People preferred something that is a reward, as opposed to saying if you don’t do this, you’re going to lose coverage,” said MaryBeth Musumeci, associate director at the program on Medicaid and the uninsured at the Kaiser Family Foundation.
Medicaid is the nation’s largest public insurance program. It covers roughly 70 million people, or 1 in 5 Americans, and pays for everything from births to nursing-home care for senior citizens.
President Obama vastly expanded the program to people making slightly above the poverty line and balked at state proposals to impose work requirements, saying they were inconsistent with Medicaid’s goals of providing coverage.
Republicans said Mr. Trump’s stance is a much-needed reversal that will return the program’s focus to the truly needy, while steadying federal and state budgets.
“With America more than $20 trillion in debt, it is irresponsible to borrow from China to pay for people who simply don’t want to work,” said Rep. Matt Gaetz, Florida Republican.
Thursday’s announcement wasn’t a huge surprise. In November, Ms. Verma told states to start thinking about ways to get the Medicaid population into jobs.
On Thursday she said 10 states have asked CMS to bless programs that require working-age and nonpregnant Medicaid recipients to work or seek out “community engagement,” such as volunteering. They are: Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, North Carolina, Utah and Wisconsin.
States seeking waivers must ensure that beneficiaries who live in areas with high unemployment are able to meet work requirements, or at least link them to resource for job training, though they cannot use federal Medicaid funds for this purpose.
States should also figure out if many residents in those areas care for young children or elderly family members before imposing new barriers.
CMS wants states to make sure their work requirements are similar to the ones they have for food-stamp and welfare programs, to avoid confusion and make sure the proposals run efficiently.
And states must comply with federal disability rules, which means they can’t deny care to people who cannot work.
They also must make “reasonable modifications” to ensure that people battling opioid addiction aren’t harmed. For instance, time spent in medical treatment may count toward community engagement time, while those in intensive treatment may be exempt.
It’s unclear how many people could be affected.
A recent Kaiser Family Foundation study found that 60 percent of Medicaid recipients are working, while 8 in 10 lives in a family with at least one worker. Among those who didn’t work, one-third said illness or disability was the primary reason.
Kentucky, which submitted a work requirement proposal in August 2016 and modified it in July, expects nearly 97,000 fewer people to hold Medicaid coverage after five years, according to application documents.
The governor’s office expects more people to transition to private coverage as the project takes root, though in the coming years, enrollment will fluctuate for “a variety of reasons, including program noncompliance.”
“It seems to me they’re saying some people will either mess up and not submit their hours and income within the 10-day time frame, they won’t meet the 20 hours — they’ll come up shy — won’t meet the premium payment or say, ‘You know what, it’s not worth it,’” said Dustin Pugel, a policy analyst at the nonpartisan Kentucky Center for Economic Policy, a state-based think tank. “I think it’s a whole host of reasons why they might not ‘comply.’”
Mr. Pugel said many of the people on Medicaid in Kentucky work in restaurants, construction or retail. These jobs ebb and flow with the seasons and economy, so it also might be difficult for them to comply with reporting requirements under new rules.
“The majority of people who would lose coverage are people who are already working. They are just working inconsistent hours or their hours fluctuate a lot,” Mr. Pugel said. “I think it’s redundant in a way. It’s just making them prove they’re doing what they’re already doing.”