UPDATE: Indiana Medicaid work waiver approved
The Trump administration is giving states more flexibility in how they run their Medicaid program as a way to cut costs, including by allowing work requirements. Indiana is now the second state after Kentucky to win a waiver allowing the work requirements.
In addition, Indiana dropped 25,000 Medicaid enrollees after they didn’t pay premiums. The state said about half of those dropped from Medicaid got coverage elsewhere, according to Kaiser Health News.
Indiana expanded Medicaid in 2015, which added 240,000 people, but at the same time, the state began charging some adults in Medicaid a monthly premium. Those who didn't pay their premiums, which ranged from $1 to $27, were locked out of coverage for six months. Current CMS chief Seema Verma was part of the Indiana effort.
Vice President Mike Pence, who was Indiana governor when the state expanded Medicaid, and Verma, then a consultant, were both behind the Indiana plan. Now, the state is looking to expand Medicaid changes as CMS decides whether to renew the Medicaid project, called Healthy Indiana.
At least 10 states are interested in following Kentucky’s lead and implementing work requirements. Kentucky estimates its requirements will cut 100,000 Medicaid enrollees and save $2.4 billion over five years. The Hoosier state also wants a waiver to allow the state to lock out more residents from Medicaid if they don’t pay their premiums.
CMS has made no secret of its support for the work requirements so it may just be a matter of time before more states win approval.
Rosemarie Day, president at Day Health Strategies and former chief operating officer for Massachusetts’ Medicaid program, told Healthcare Dive that work requirements may make political sense in some states, but it’s difficult and costly to administer. She pointed to work requirements in the Temporary Assistance for Needy Families and Aid to Families with Dependent Children as an example.
“Requiring people to work for their healthcare also creates a real Catch-22. If a person loses their health coverage for not working, but they weren't able to work due to an undiagnosed physical or mental health issue, then they will be prevented from solving the problem that is preventing them from working. It would take an extremely benevolent (and costly) administrative process to disentangle these issues,” Day said.
How much would work requirements affect Medicaid enrollees? The Kaiser Family Foundation estimated nearly eight in 10 adults on Medicaid are already in working families, and most are working themselves. However, for those that it does affect, it could result in millions losing coverage. A Health Affairs analysis found that if work requirements were applied to Medicaid nationwide, 11 million enrollees would be at risk of losing coverage.
Nevertheless, in a 10-page letter to state Medicaid directors relaying that the CMS would accept work requirements in waivers, Verma said employment and higher earnings improve mental health and overall well-being.
“CMS recognizes that a broad range of social, economic, and behavioral factors can have a major impact on an individual’s health and wellness, and a growing body of evidence suggests that targeting certain health determinants, including productive work and community engagement, may improve health outcomes,” she wrote.