Trump Administration Allows States to Impose Medicaid Work Requirements, Approves Kentucky Proposal

This week, the Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma issued new guidelines encouraging states to require “able-bodied” Medicaid beneficiaries to work or volunteer to remain eligible for health coverage benefits.

Indicating a departure from prior CMS policy regarding work as a condition of Medicaid eligibility or coverage, states can now require beneficiaries to engage in at least 20 hours per week of employment or community engagement activities, such as job skills training, education, or caregiving, to earn coverage. CMS has signaled that elderly or disabled individuals, as well as children and pregnant women, would be excluded from work requirements. Individuals with substance use disorders may receive slight modifications to the requirements.

Approximately one dozen states have already filed applications with CMS to add work requirements to their state Medicaid programs. Today, one of those states—Kentucky—received approval from the federal agency to impose strict work requirements on some beneficiaries as part of an extensive overhaul of the state’s program. Recall, prior to joining CMS as the administrator, Seema Verma was previously a private consultant and architect of the Kentucky Medicaid plan that was approved today.

Able-bodied beneficiaries in Kentucky will now be required to complete 80 hours of employment or community engagement per month to remain eligible for coverage. Beneficiaries who get a new job or salary without notifying the state would be locked out of coverage for six months. Kentucky will also require beneficiaries who gained coverage through Medicaid expansion to pay for monthly premiums based on income levels and meet certain milestones to earn dental and vision care.

It is unclear how many people will be impacted by the new work requirement rules being proposed by states throughout the country. A recent study by the Kaiser Family Foundation determined that approximately 60 percent of “able-bodied” Medicaid beneficiaries already work and a third of those who do not hold employment cite an illness or disability that prevents them from working.

Legal action by several Democratic and liberal advocacy groups is expected as a result of the new guidance issued by CMS this week. These entities argue Medicaid is a health coverage program, and by adding work requirements, the program’s purpose is undermined.

The work requirement application by Indiana, the home state of Vice President Mike Pence, is expected to be approved in short order. As other states—Arizona, Arkansas, Kansas, Maine, Mississippi, New Hampshire, North Carolina, Utah, and Wisconsin—await their CMS decision, it remains to be seen the full impact of CMS’s latest policy guidance.