Push for Medicaid Work Requirements Encounters Headwinds

Efforts by the federal government and some states to require certain Medicaid beneficiaries to work in order to maintain eligibility for benefits has run into a series of obstacles, both in the courts and in state legislatures. 

The push began in January 2018, when the Trump administration released guidance to state Medicaid programs permitting them, for the first time, to experiment with requiring beneficiaries to work in order to maintain medical benefits. The guidance specified that states could not impose work requirements on people with disabilities, pregnant women, minor children, the elderly or people enrolled in schools. 

Although the guidance expressly exempts people receiving Social Security disability benefits or who are institutionalized, it provides little direction to states as to who else would be protected, and advocates remain concerned that many people with disabilities will lose Medicaid coverage. 

States seeking to add work requirements must first obtain approval from the federal Department of Health and Human Services (HHS). Soon after issuing its guidance to states, HHS approved a plan for Kentucky, allowing the state to require Medicaid beneficiaries to complete 20 hours of work a week in order to keep receiving benefits.

In June 2018, the U.S. District Court for the District of Columbia blocked Kentucky’s plan from going into effect, saying that the plan exceeded HHS’s authority under the Medicaid Act. After HHS approved a new and different plan for Kentucky, on March 27, 2019, the same district court blocked the new plan. 

In contrast, work requirements actually were implemented in Arkansas in June 2018, and in the subsequent six months an estimated 18,000 Medicaid benefiaries lost coverage as a result. But Arkansas' program, like Kentucky’s proposed program, has been put on hold by the court’s March 27 decision. 

In the decision, the court focused on whether the plan met the express goal of the Medicaid Act: to expand health insurance coverage for low-income populations. As the court saw it, HHS, in approving the work requirements plans for Kentucky and Arkansas, failed to consider the likely loss of coverage for a significant number of beneficiaries. 

By Kentucky’s own estimate, submitted in its application to HHS, some 95,000 people would lose Medicaid coverage over five years due to the imposition of the work requirements. 

“[The] Secretary never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens,” the court wrote, referring to Kentucky’s program.

The Trump administration is appealing the decision. 

Despite this setback, HHS and some states are pushing ahead with efforts to impose work requirements. In its annual budget proposal, released in March 2019, HHS recommended that all state Medicaid programs implement work requirements. 

HHS has also approved work plans for Arizona, Michigan, Ohio and Utah. However, legislation requiring state Medicaid agencies to seek HHS approval of similar programs has failed in West Virginia, Wyoming and Iowa. 

To read a report from the Center on Budget and Policy Priorities contending that people with disabilities are vulnerable to losing Medicaid coverage due to work requirements, click here.