Biden Administration Revokes Work Incentives for Medicaid | Citizens Against Government Waste

Biden Administration Revokes Work Incentives for Medicaid

The WasteWatcher

As part of its immediate onslaught against Trump administration policies, the Biden administration began in February to unravel Medicaid work requirements that had been provided for 10 states.  Two states on that list, Arizona and Indiana, were sent letters on June 24 by Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure, who wrote that to “require work and community engagement as a condition of eligibility are not likely to promote the objectives of the Medicaid statute.”  The June 28 MedCity News reported that these states followed four other states, Arkansas, Michigan, New Hampshire, and Wisconsin, that had their Medicaid work projects revoked in March 2021. 

In 2017, the Trump administration began working with states to allow them for the first time to implement work requirements for abled-bodied adults that were on Medicaid under Section 1115 waivers.  Democrats had said the rules were unlawful and wanted to stop them from the very beginning, claiming they were designed to kick people off Medicaid’s rolls.  Their actions ignored the fact, as noted by a January 11, 2018 Washington Post article, that while 74 million people were on Medicaid, the work requirements would only affect a small minority of beneficiaries.  Children, who are nearly 50 percent of enrollees, were excluded along with the 10 million enrollees with a disability.  A companion Post article reported that a Kaiser Family Foundation poll found that 56 percent of Democrats, 77 percent of independents, and 82 percent of Republicans supported allowing states to require adults without disabilities to work or be looking for work in order to get Medicaid.

In March 2017, then-Secretary of Health and Human Services Tom Price and CMS Administrator Seema Verma sent a letter to governors committing to creating “a new era for the federal and state Medicaid partnership,” giving the states more freedom to conceiving programs that “meet the spectrum of diverse needs of their Medicaid population.”  The administration promised to empower the states to advance innovative solutions that would improve quality, accessibility, and outcomes in a cost-effective manner and be able to address the “diversity and complexity” of the Medicaid population while protecting the most vulnerable that depend on the program.

CMS Administrator Verma had long been concerned about expanding Medicaid under the Patient Protection and Affordable Care Act (ACA), or Obamacare, to abled-bodied adults and that was reflected in the letter that said, “The expansion of Medicaid through the [ACA] to non-disabled, working age adults without dependent children was a clear departure from the core, historical mission of the program.  Moreover, by providing a much higher federal reimbursement rate for the expansion population, the ACA provided states with an incentive to deprioritize the most vulnerable populations.  The enhanced rate also puts upward pressure on both state and federal spending.  We are going to work with both expansion and non-expansion states on a solution that best uses taxpayer dollars to serve the truly vulnerable.”  One policy that Republicans and states had long desired was work requirements for abled-body Medicaid recipients.

In January 2018, the Trump administration issued guidance to states that allowed them for the first time to, “support state efforts to improve Medicaid enrollee health outcomes by incentivizing community engagement among able-bodied, working-age Medicaid beneficiaries.  The policy responds to numerous state requests to test programs through Medicaid demonstration projects under which work or participation in other community engagement activities – including skills training, education, job search, volunteering or caregiving – would be a condition for Medicaid eligibility for able-bodied, working-age adults.  This would exclude individuals eligible for Medicaid due to a disability, elderly beneficiaries, children, and pregnant women.”

When the guidance was issued, Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, North Carolina, Utah, and Wisconsin submitted demonstration project proposals that included employment and community engagement initiatives.

Yet, no sooner had the guidance been issued, there were howls of outrage from social welfare groups, like the Southern Poverty Law Center and National Health Law Program, arguing it would gut Medicaid and that the waivers demonstrated the Trump administration’s “indifference” for the poor.  Lawsuits were filed and Arkansas, the first state to adopt work requirements and the only one to implement them, saw the U.S. District Court for the District of Columbia block its program in March 2019 within five months of activation.  About 18,000 people, or 2 percent of the state’s Medicaid population, lost coverage, but instead of halting the program, the state should have been allowed to fix any early implementation issues.  Kentucky’s and New Hampshire’s efforts to implement work requirements soon followed and were blocked by July 2019.  The case was appealed but upheld by the U.S. Court of Appeals for the D.C. Circuit.

While the Biden administration claims the reason for revoking the work requirements is the COVID-19 pandemic, the real reason is the program was extremely unpopular with Democrats.  The Biden administration withdrew White House support in the pending court cases that challenged Arkansas’ and New Hampshire’s programs, which by July 2020 had reached the Supreme Court.

Interestingly, while the Supreme Court canceled oral arguments following a request from the Biden Justice Department, as of the posting of this WasteWatcher, it has not yet vacated the two lower-court decisions, according to the SCOTUS Blog.  Arkansas wants to continue with the arguments and resolve the legality of the policy, stating in its reply to the court. “the question presented remains just as pressing as when the Court granted review.”

Sources say it is only a matter of time before SCOTUS vacates the cases considering the Biden administration’s position on the issue, but considering the support the program had prior to the Trump administration implementing it, expect it to be revived in the future.  The Washington Post admits, “Medicaid work requirements are one of the least politically controversial things Trump has done,” but like many other effective and popular policies that were adopted during his administration, it is being rejected by President Biden simply because it was done when Donald Trump was President.

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