Michigan will roll back expansion of its Medicaid program unless it is allowed to institute controversial work requirements for the program, according to an application Gov. Rick Snyder, a Republican, sent to HHS this week.
Under the proposal, beneficiaries will be required to either work, volunteer, attend job training or engage in other health-promoting activities for a minimum of 80 hours a month in order to keep their coverage, along with tracking and logging their progress in monthly verifications to prove they are complying with the requirements. The proposal includes 12 exemptions for populations such as pregnant women and those who are caregivers for children under 6.
Approval for the extension request is being sought for early 2019, with a slated program introduction between six months to a year later. To date, four states (Arkansas, Indiana, Kentucky and New Hampshire) are imposing work requirements for Medicaid and eight others (South Dakota, Maine, Kansas, Arizona, Mississippi, Wisconsin, Utah and Ohio) have submitted waiver applications.
The application is likely to be approved, as CMS has made work requirement implementation a priority since the beginning of this year and the policy has quickly become a linchpin for the current administration. In a 10-page letter to state Medicaid directors, the agency urged them to test programs that include work requirements as a condition for eligibility and, so far, has approved them in four states.
Michigan's proposal impacts beneficiaries with income between 100% and 133% of the federal poverty level who have been eligible for or enrolled in Medicaid for four years. Those who do not meet the program's healthy behavior, work or cost-sharing requirements will be notified 60 days before the end of their fourth year on Medicaid that their coverage will be terminated until they comply with the new strictures.
The state expanded Medicaid in 2014 under the Healthy Michigan Plan (HMP), which granted coverage to more than 1 million low-income citizens and currently enrolls roughly 655,000 people. The introduction of work requirements is meant to "empower individuals" to improve their health by promoting "accountability, self-sufficiency, and independence from public assistance," according to the application, which also touts the positive correlation between income and health.
The petition similarly posits the new stipulations will help beneficiaries realize the mental and physical health benefits associated with gainful employment, along with providing future opportunities to obtain insurance through an employer or the federal marketplace.
Yet the many critics of work requirements point out that most Medicaid recipients who can work are already doing so, and that instituting and tracking work requirements will heap additional administrative burden onto an already-taxed system. Two recent JAMA studies found evidence backing up their opposition.
The first found that, among the 11 states with submitted waiver applications, only 3.9% to 29.2% of Medicaid-eligible individuals were subject to proposed work requirements. In that subset, only 0.3% to 5.4% were not meeting those requirements, bringing up the question of whether the cost of implementation is justified by the work requirements' "narrow projected reach."
The second study, also published in JAMA and building off the former's findings, estimated changes in Medicaid enrollment and spending if work requirements were applied on a country-wide scale. If that were to happen, 2.1 million beneficiaries would be at risk of losing coverage, representing 2.8% of current Medicaid enrollees and accounting for a mere 0.7% of Medicaid spending. Yet, the study's authors pointed out, these minimal savings would "likely come at substantial cost in terms of human health" due to a potential spillover effect, wherein exempt Medicaid enrollees lose their coverage because they're unable to comply with stringent documentation requirements for reporting their work hours or reason for exemption as frequently as every month.
The murky outcomes of the policies caused a federal judge to invalidate Kentucky's work requirements in late June, calling their institution "arbitrary and capricious." Kentucky was the first state to receive approval to test work requirements. U.S. District Judge James Boasberg wrote in his ruling that the government never adequately considered whether the requirements "would in fact help the state furnish medical assistance to its citizens," a setback to the administration's aim to link benefits to employment.
In response, Kentucky halted non-emergency medical transportation, along with dental and vision coverage for Medicaid patients, claiming it could not afford to pay for those programs if its waiver was not approved. Following pushback from social advocacy groups, the state reluctantly reinstituted the benefits.
Arkansas, which started kicking thousands of people off Medicaid for failing to comply in July, is currently undergoing similar litigation. Nine more states are waiting on the outcome of their waiver application, including new entrant Michigan.
Correction: In a previous version of this article, South Dakota was not identified as a state pending waiver approval.