Center on Budget & Policy Priorities: More States Reconsidering Medicaid Work Requirements

WASHINGTON, Jan. 10 -- The Center on Budget and Policy Priorities issued the following blog:

Six states -- Arizona, Indiana, Kentucky, Maine, New Hampshire, and Virginia -- have reversed or suspended their plans to take Medicaid coverage away from people who don't meet work requirements. Other states with similar approved or pending waivers from the federal government also should reconsider these harmful policies.

The six states reconsidering their work requirement policies cited legal challenges and significant pending coverage losses, among other reasons:

* In early 2019, newly elected Maine Governor Janet Mills withdrew a waiver that would have let the state take Medicaid coverage away from low-income parents, with about 5,000 people losing coverage under the state's own projections. Mills said the waiver would have left "more Maine people uninsured without improving their participation in the workforce."

* New Hampshire policymakers acted on a bipartisan basis in July to suspend its policy. New Hampshire was on the brink of ending Medicaid coverage for almost 17,000 people when Governor Chris Sununu and the legislature hit pause.

* Arizona told the federal Centers for Medicare & Medicaid Services (CMS) in October 2019 that it was suspending its policy "until further notice," citing court challenges in other states and "the evolving national landscape" for such policies. Even before the suspension, Arizona appeared to be experiencing problems with implementation and had delayed the effective date of the work requirement, saying that it needed more time to implement it in "regions with limited employment, educational and training opportunities, accessible transportation and child-care services."

* Indiana, facing a lawsuit challenging its waiver, announced in October 2019 that it was suspending its policy until its lawsuit is resolved.

* In December 2019, CMS honored Virginia's request to not act on the state's work requirement proposal. Governor Ralph Northam noted that "the changed makeup of the General Assembly" made it unlikely that the state would move forward with a program that "could cause tens of thousands of Virginians to lose health coverage," a concern the state raised to CMS. The state initially projected that more than 25,000 people would lose coverage. Estimates that take into account actual coverage losses in Arkansas, the only state to reach the point of taking away coverage, suggest that closer to 75,000 Virginians could have lost coverage.

* Similarly, newly elected Kentucky Governor Andy Beshear campaigned against the state's Medicaid waiver and withdrew it in December 2019 as one of his first acts in office. Affirming that, "health care is a basic human right and every Kentucky family deserves to see a doctor and receive treatment when they are sick," he stated that he would "not allow burdensome roadblocks and unnecessary red tape to stand in the way of the health and well-being of Kentuckians." The decision protected health coverage for nearly 100,000 low-income state residents.

Other states with approved work requirements -- Michigan, Ohio, South Carolina, Utah, and Wisconsin -- or those considering such policies should take note. Indeed, Michigan Governor Gretchen Whitmer urged suspension of her state's work requirement, which took effect on January 1. Michigan's policy is expected to cause between 61,000 and 183,000 Michiganders to lose coverage, in part because, as the governor rightly noted, "Michigan's statute is more sweeping than Arkansas's waiver, threatening a broader range of adults with more exacting reporting demands." State law requires Whitmer to implement the waiver, but she has called on state lawmakers to consider legislation similar to New Hampshire's and to suspend the policy entirely now that the state is facing its own legal challenge. The legislature has so far refused.

State officials are rightly pointing to new evidence and "the evolving national landscape" for work requirement policies to explain their decisions to suspend their policies. Since most states with approved or pending work requirement waivers adopted these policies:

* Evidence from Arkansas and New Hampshire has shown that work requirements lead to large coverage losses. In Arkansas, the first state to implement a requirement, over 18,000 beneficiaries lost Medicaid over the first seven months -- nearly a quarter of those subject to the requirement. In New Hampshire, almost 17,000 people -- or about 40 percent of those subject to the requirement -- were set to lose their coverage before state policymakers acted on a bipartisan basis to pause the policy.

In both states, the number of people losing (or potentially losing) coverage exceeded estimates of the presumed target population: people who are neither working nor qualify for an exemption. That indicates that working people and people who should be exempt are almost certainly losing coverage. And New Hampshire's experience was similar to Arkansas' despite its determination to conduct better outreach. Its expensive outreach activities, such as mail notifications, town halls, phone calls, and text messages, didn't prevent beneficiary confusion or struggles among people with serious health needs to obtain exemptions.

* Evidence from Arkansas shows that work requirements aren't helping people find jobs. Only a small minority of those who lost coverage in Arkansas found jobs, state data show, and most of those would likely have found jobs with or without the work requirement policy. A study by Harvard researchers found no significant rise in employment, hours worked, or overall rates of community engagement activities among those subject to the work requirement -- but it did find sharp increases in uninsured rates.

* Federal courts have vacated work requirement waivers in Arkansas, Kentucky, and New Hampshire. In each case, the court affirmed that a central objective of Medicaid is to provide coverage and found that CMS didn't adequately factor the potential coverage losses from the waivers into its approval decision. CMS and Arkansas are appealing the decisions and, during oral arguments on October 11, the appeals court judges aggressively questioned Trump Administration lawyers on how work requirements advance Medicaid's central objective of providing coverage.