States debate Medicaid work requirements in wake of midterms
Virginia is the latest state to file a waiver application with CMS to implement a work requirement for its Medicaid program, which it is expanding starting next year.
Meanwhile, CMS Administrator Seema Verma said she will review the work requirement impact in Arkansas after more than 12,000 people lost coverage when that state's work requirement took effect. That said, Verma insisted CMS remains committed to work requirement waivers.
- Also, Wisconsin, which already received CMS approval for a work requirement waiver, is now having second thoughts after the gubernatorial election. Governor-elect Tony Evers, a Democrat who knocked off Republican Gov. Scott Walker this month, said he might end the Medicaid requirement in his state.
Medicaid expansion, which was part of the Affordable Care Act, is credited with getting more than 15 million people health insurance.
Expansion helps improve care access, but that comes with added costs. A recent HHS Office of the Actuary report on Medicaid projected the program's expenditures will grow at an average annual rate of 5.7% over the next decade, faster than the gross domestic product. The report warned that Medicaid's expenditure growth could strain federal and state budgets.
Fitch Ratings also said this year that rising Medicaid costs may force state and local communities to cut spending and costs or make changes in other programs, such as education, transportation, public safety, housing and environment.
States, in turn, are exploring cost-cutting solutions. One way to cut costs is to require Medicaid recipients to work. Those who don't get jobs, or fail to tally enough educational or community engagement hours, lose coverage. Many of those who get a job will be eligible for other types of insurance, including employer-sponsored plans. Supporters of work requirements argue it gets more people into employment and cuts the size of Medicaid.
CMS approved waivers for Arkansas, Indiana, Kentucky, New Hampshire and Wisconsin. There are 10 other states with pending waivers. A court rejected Kentucky's plan, which caused the state to submit a similar Plan B to CMS. The agency approved that option, too, but the new plan will likely wind up in court again.
While Medicaid work requirements are seen as a way to contain growth, the flip side is that people lose health insurance and often access to care as well.
Medicaid expansion is connected to better health outcomes. A recent Government Accountability Office study found that expansion improves care access and leads to better health results. Plus, a new report by Georgetown University's Health Policy Institute and the University of North Carolina's NC Rural Health Project found that expansion has especially helped low-income adults in small towns and rural areas.
However, an analysis by consulting firm Avalere Health found that pent-up healthcare needs lead to more claims costs after Medicaid expansion.
Nevertheless, more states are at least exploring the idea of expansion, including red states like Missouri, Mississippi and Oklahoma. Earlier this month, voters in Utah, Nebraska and Idaho approved Medicaid expansion.
Plus, Maine, whose voters approved a similar proposal two years ago, is expected to finally expand Medicaid next year once Republican Gov. Paul LePage leaves office. A recent court decision demanded Maine expand Medicaid despite the governor's objections. LePage requested a stay on the ruling and will likely run out the clock on his term before the state can expand coverage to another 70,000 people.
Despite Medicaid expansion, the number of Americans in the federal/state program is actually on the decline. A recent report from A2 Strategy Group found that Medicaid covered 1.1 million fewer people this year compared to a year ago. It's the first year since the ACA that Medicaid enrollment declined. That's likely connected to an improved economy and people finding health insurance elsewhere.