On January 28, the Biden administration released an executive order directing federal agencies to “re-examine” Medicaid policies that “may reduce coverage or undermine the program,” as well as “policies that make it more difficult to enroll in Medicaid.” And on February 12, the Biden administration followed that executive order by specifically targeting work requirements as one of these policies and removed the original January 2018 CMS letter to state Medicaid directors encouraging work requirement waiver applications. These actions reverse the harmful Trump administration policy that undercuts access to coverage and care through Medicaid as well as communicate to states and policymakers that we must focus on ways to expand health coverage for the many who still need it. Unfortunately, this doesn’t mean an end to Medicaid work requirements – at least not right away.
What does this mean for states that received approvals for work requirement waivers by the previous administration?
The Trump administration approved work requirement waivers for 12 states, but by the end of the administration’s term, none were in effect, either due to being blocked by the courts, delays due to the COVID-19 pandemic, or states realizing the harm of work requirements and choosing to reverse or suspend such policies. The Biden administration faces barriers in cleanly rescinding approved waivers because before leaving office, then-CMS Administrator Seema Verma asked states to sign an agreement that intended to significantly lengthen and complicate the 1115 experimental termination process.
The Biden administration’s solution to the previous administration’s agreements was to send letters to states with approved work requirement waivers to notify them that CMS has “preliminarily determined” that work requirements do not further Medicaid program objectives – providing affordable health care coverage. In these letters, CMS cites data that shows tens of thousands of people lost coverage in states that actually implemented work requirements. Early data from states that implemented work requirements also revealed that beneficiaries’ circumstances like caregiving responsibilities, illness or disability, and school attendance were reasons why a beneficiary could not work the allotted number of hours (typically 80 hours per month) to retain their Medicaid coverage. Although states agreed to exempt “medically frail and those who can’t work because of a disability or medical condition,” data in Arkansas suggested that issues navigating the red tape (e.g., obtaining physician testimony, medical records, or other required documents) to prove that exemption rules had been met, as well as technological difficulties led exemption-eligible people to lose coverage. In the letter, CMS also pointed to the high unemployment rates associated with our current, pandemic-fueled, economic downturn as a reason for why Medicaid beneficiaries may face additional challenges in meeting the employment expectations to retain their Medicaid coverage. Kaiser Family Foundation data show that most Medicaid adults were working prior to the COVID-19 pandemic but have since faced unemployment due to the loss of jobs in industries likely affected by the economic downturn.
Looming in the background of the Biden administration’s Medicaid policy agenda is the upcoming Supreme Court case to decide the legality of Medicaid work requirements. This case is based on Arkansas’s and New Hampshire’s implementation of Medicaid work requirements. The Supreme Court decided to hear the cases after the DC appeals court, in a unanimous opinion written by a judge appointed by President Reagan, affirmed that the HHS Secretary’s approval of Medicaid work requirements…was unlawful because the Secretary failed to consider the impact on coverage. In anticipation of the March 29 oral arguments, Acting Solicitor General Elizabeth Prelogar indicated the Biden administration is reversing the policy and asked the justices to cancel the oral arguments. We are hopeful that the Biden administration’s actions will render the Supreme Court case moot and that the administration will then be able to focus on ways to expand access to Medicaid coverage, not impede it.
What if states wish to persist in implementing work requirements for their Medicaid program?
States have 30 days from February 12 to provide additional information to CMS that they believe “may warrant not withdrawing” the work requirement authorities. If the Biden administration does rescind a state’s previously approved work requirement waiver, a state could then pursue an administrative hearing to challenge the rescission.
What can we as advocates do?
The evidence from states that have already implemented Medicaid work requirements is clear – work requirements caused coverage interruptions that led to increased health care utilization and health care costs while not having the intended impact on employment trends (and in fact, we’ve seen that work requirements impede employment). The most important work that we as advocates can do is continue to emphasize the harms of work requirements, especially in light of the pandemic and the economic downturn that have exacerbated unemployment rates, making it harder for people to find employment opportunities. It is clear now more than ever that tying work to health care leaves people vulnerable during already difficult times.