A Medicaid Model That Includes Work Requirements, Premiums, Time Limits & Drug Testing

13 Mar A Medicaid Model That Includes Work Requirements, Premiums, Time Limits & Drug Testing

Last year the GOP and Trump Administration made numerous attempts to reform Medicaid by trying to repeal the Affordable Care Act (ACA) and impose federal spending caps for the Medicaid program. While these efforts were unsuccessful, the future of the Medicaid program is still vulnerable to administrative actions from CMS. It is evident that this administration has a very different vision for the future of Medicaid than its predecessor.

A study conducted by the Henry J Kaiser Family Foundation highlights Medicaid’s changing landscape. For instance, states that expanded their programs under the ACA such as Kentucky, Indiana, Arkansas, Arizona, and New Hampshire are also seeking work requirements and other conditions for beneficiaries. Furthermore, some states that did not adopt expansion under the Obama administration, like Virginia, are now considering it under the condition that work requirements are put into effect.

How This New Medicaid Model Affects The States

The new vision for the Medicaid program is a stark contrast to that of the ACA’s. The Kaiser Family Foundation estimates that the work requirements and additional restrictions will affect about 24.5 million people including non-elderly and non-disabled adults. Consequently, childless adults are at the highest risk of losing coverage. Despite the large population that will be affected by new conditional requirements, it is important to note that the work requirements and restrictions will not affect the majority of those participating in the program. For example, children, elderly, disabled, and pregnant enrollees make up more than half of Medicaid enrollees and are either exempt from such laws or covered by federal law. 

The work requirements and other prerequisites suggest that states entertaining these waivers are using them as a method to cut costs by reversing Medicaid expansion or introducing downsized programs. Medicaid professionals see this as a significant threat and inconsistent with how waivers have been used historically. The executive director of Georgetown University’s Center for Children and Families, Joan Alker, sees them as a way to simply cut coverage. According to Alker, “Under any previous administration, waivers have not been used to devise ways to cut coverage.” 

The state of Kentucky, under the leadership of Governor, Steve Beshear (D), was among the states that had expanded its Medicaid program under the ACA, extending coverage to an additional 350,000 enrollees. According to Gallup, the state experienced a historic drop in its uninsured rates between 2013 and 2016 from 20.4% to 7.8%. Despite the increase in eligibility the newly elected Kentucky Governor, Matt Bevin (R), did not agree with the expansion. He believes that the program is for the most vulnerable individuals and the work requirement serves to preserve the program and its services. In August 2016, Governor Bevin submitted a new plan that included work requirements to HHS.

According to Kentucky.gov, “the submission of this waiver is the result of many months of extensive research, planning and time spent traveling the state listening to Kentuckians,” said Gov. Bevin. “Kentucky HEALTH will allow us to continue to provide expanded Medicaid coverage, but unlike the current Medicaid expansion under Obamacare, it will do so in a fiscally responsible manner that ensures better health outcomes for recipients.” Shortly after the New Year, CMS approved Kentucky’s Section 1115 demonstration waiver, Kentucky Helping to Engage and Achieve Long-Term Health aka “KY HEALTH.”  Health Policy Matters has documented what this will mean for the state and notes that the full implementation is expected to begin in July of this year.

After a 5-year period, The Commonwealth Fund estimates that enrollment rates would drop “nearly 15 percent of beneficiaries.” This figure includes enrollees made eligible from the expansion and traditional enrollment. According to Governor Bevin, those 100,000 people would need to receive insurance from an employer or through a private provider. This could be problematic since KFF has reported that 60% of adults on Medicaid are already working.

Health professionals, including Cindy Mann of Manatt Health, are concerned with the direction Medicaid is headed. They feel that the consequences of work requirements are not being taken into consideration. Mann stated, “the people who policymakers and the public would want to protect, with medical conditions, barriers to employment, they’re going to be exempt. But the system isn’t geared to get these people out of harm’s way. It’s the people who are least able to gather the paperwork required that will get caught in the cracks and will lose their coverage.”

The debate over Medicaid comes down to two competing philosophies. Republicans argue that the program has expanded beyond its original objective, thereby compromising its ability to provide coverage and services to the most vulnerable. They argue that work requirements and conditional restrictions are aimed at those individuals for whom the program was never intended; moreover, the conditions for enrollment are designed to help people become independent from Medicaid. Democrats see the approval of 1115 waivers as a way to simply cut coverage since attempts to reform the program in 2017 were a failure. Democrats argue that Medicaid is designed to provide insurance and not to encourage employment. Cutting costs and reducing coverage only prevents the program from performing its core mission. As legislators debate, some states have already received approval for their work requirement waivers. It appears, that this is only the beginning and its likely that more states will follow suit.