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Stephanie Pellitt

Policy and Advocacy Associate

CMS Issues Guidance Allowing Medicaid Work Requirements

January 11, 2018 | Medicaid | Waivers/SPAs | Comments
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On Thursday, the Trump Administration released guidelines for states to create the first-ever work requirements for Medicaid recipients. The guidance targets “able-bodied adults” with some exemptions. While details are still emerging, the National Council has grave concerns that the policy’s exemptions will not be broad enough to protect all individuals with mental health and substance use disorders. Ten states have asked the federal government for approval to institute Medicaid work requirements. With this new guidance, the Administration is expected to begin approving these requests.

Despite numerous attempts, work requirements have never been permitted in Medicaid’s 52-year history. However, CMS Administrator Seema Verma recently proclaimed that Trump Administration will approve such proposals. In a letter to State Medicaid Directors, CMS outlined policy guidance for implementing Medicaid work requirements.

The guidance exempts Medicaid enrollees with disabilities, the elderly, pregnant women and children from job requirements. States must also exempt individuals who are considered “medically frail,” which includes individuals with mental illness and addiction per a 2013 federal regulation. Specifically, that rule requires states to include people with “disabling mental disorders” and “chronic substance abuse disorders” in their definition of medically frail. The guidance also notes that people with substance use disorders must be afforded “reasonable modifications.” These modifications can include counting time spent in treatment towards the work requirements or exempting individuals in participating in intensive addiction treatment from work requirements.

States that choose to pursue work requirements are given a great deal of flexibility from CMS’ guidance. States can determine how “able-bodied adults” will be defined and what activities will count as work. The letter says that work activities “include, but are not limited to, community service, caregiving, education, job training, and substance use disorder treatment.”

States are encouraged to help Medicaid enrollees successfully complete the work requirement through job training, child care, and other supports, but are prohibited from using Medicaid funds to do so. For enrollees that already have jobs, are in school or are caregivers, they will need to regularly document with the state’s Medicaid agency that they are in compliance or risk losing Medicaid benefits.

The National Council opposes making employment a condition for health care coverage as mental health and substance use conditions can result in impairments that preclude individuals from consistent, full-time employment.

With this new guidance, reports indicate that federal officials will quickly act to approve Kentucky and Indiana’s proposed work requirements. Any work requirement approval is likely to be challenged in the courts by a number of health care and legal advocacy groups. Other states that have requested work requirements through Medicaid waivers include: Arizona, Arkansas, Kansas, Maine, Mississippi, New Hampshire, Utah and Wisconsin.