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Trump administration unveils Medicaid changes, promotes work requirements for coverage

It opens the door for states to experiment at the expense of the country's most vulnerable.

Administrator of the Centers for Medicare and Medicaid Services Seema Verma listens at right as President Donald Trump speaks during a meeting on women in healthcare, Wednesday, March 22, 2017, in the Roosevelt Room of the White House in Washington. (AP Photo/Evan Vucci)
Administrator of the Centers for Medicare and Medicaid Services Seema Verma listens at right as President Donald Trump speaks during a meeting on women in healthcare, Wednesday, March 22, 2017, in the Roosevelt Room of the White House in Washington. (AP Photo/Evan Vucci)

For the first time in a half-century, a philosophical shift is underway for the country’s safety net health system, Medicaid. The Trump administration issued guidance Thursday permitting states to cut a person’s health insurance off unless they work or engage in other community activities.

The Centers for Medicare and Medicaid (CMS), a division within the federal health department, encouraged state Medicaid directors to test forms of “community engagement,” a euphemism for work requirements. So far, 10 states sought federal approval to upend their Medicaid programs. Thursday’s guidance guarantees these requests will be granted, and opens the door for other states to experiment at the expense of the country’s most vulnerable. Three other states are already contemplating doing so.

The document suggests children and people struggling with opioid addiction should be excluded from new work requirements.

CMS administrator Seema Verma has repeatedly said she wanted to implement work requirements for the 1965 health insurance program for the poor, disabled, and elderly. In fact, her health consulting firm tried to push work requirements under the Obama administration, but was denied.

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The notion of tethering work activities with government programs is decades long. Programs like the Temporary Assistance for Needy Families, which provides cash assistance to persons with modest incomes, and the Supplemental Nutrition Assistance Program, or food stamps, make work conditional of federal assistance. This idea was pushed in the 1990’s, and even advertised through music.

Thing is: the vast majority (80 percent) of Medicaid beneficiaries who can work, do so, or live in working families. Those who aren’t working are either caregivers, students, or disabled:

Conservatives argue implementing work requirements will incentivize the rest to work. In fact, research from the 1990s welfare reform suggests the idea isn’t successful. The Centers on Budget and Policy Priorities collected an array of evidence that suggests employment increases were modest and temporary. Moreover, work requirements did not lift people out of poverty.

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Medicaid largely protects low-income people from financial catastrophe, in addition to facilitating health care. In fact, states that tried to expand access to Medicaid, rather than cut access, saved people from filing bankruptcy. A study, distributed by the National Bureau of Economic Research, found that “in addition to reducing the incidence of unpaid medical bills, the [Medicaid expansion] reform provided substantial indirect financial benefits to households.” Expanding Medicaid insurance reduced unpaid Medicaid bills by $3.4 billion. States that opted out of Medicaid expansion had higher rates of uninsured persons and hospitals were six times more likely to close.

Jennifer Ryan, a former CMS employee and now vice president at Harbage Consulting, recently told ThinkProgress that imposing work requirements went against the statute outlined in the Title XIX of The Social Security Act, which created Medicaid. Consumer advocates say work requirements aren’t legal, and one Maine group said they’d file a lawsuit once their state’s work requirement is OKed by the federal government.