Feds approve Michigan’s Medicaid work requirement, beginning in 2020

Dec. 21--WASHINGTON -- The Trump administration on Friday approved Michigan's request to require some low-income individuals receiving Medicaid to prove they are working, trying to find work or undergoing training -- or risk losing their health care coverage.

The Centers for Medicare & Medicaid Services (CMS) sent Gov. Rick Snyder a letter approving the request, which was part of legislation passed earlier this year by the Republican-dominated state Legislature.

Michigan joins seven states to have a work requirement for Medicaid coverage approved by the Trump administration, joining Arkansas, Indiana, Kentucky, Maine, New Hampshire and Wisconsin. Ten other states have applications pending.

Maine's program also was approved Friday.

The work requirement applies only to certain able-bodied adults between the ages of 19 and 62 who already earn above the federal poverty level and it would require them to report at least 80 hours a month of work or training activities to keep their coverage under Michigan's Medicaid expansion program, otherwise known as Healthy Michigan.

By some estimates, it could apply to more than 500,000 of the approximately 655,000 people in the Michigan program. People on traditional Medicaid, including those who earn below the federal poverty limit, would not be affected, nor would people who are pregnant, caretakers of children under 6, disabled or deemed "medically frail." Other exceptions could apply as well.

Anyone failing to report the required hours over the course of three months in a given 12-month period, however, could lose their coverage for at least a month and couldregain the coverage only after proving they were in compliance.

Snyder, whose second and final term ends this month, said that by approving the waiver, the federal government cleared the way for Healthy Michigan to remain in place for another five years, at least. That program, under the Affordable Care Act, has provided coverage to more than a million recipients -- including individuals making up to about $16,700 a year -- while requiring them to engage in certain healthy lifestyles.

New rules will fall to Whitmer to implement

Besides adding the work requirement, the waiver allows the state to charge up to 5 percent of a person's income for coverage under some circumstances if they have been on Healthy Michigan's rolls for more than four years.

"The Healthy Michigan Plan has been a success story that can be a model for the entire country on how to assist people in leading healthier lives," Snyder said in a prepared statement. "I am pleased that we will be able to continue this initiative."

But with the program set to go into effect on Jan. 1, 2020, it will be up to the incoming governor, Democrat Gretchen Whitmer, who opposed the work requirement proposal, to put into place a system that can meet the Legislature's demands.

Whitmer's transition team put out a statement saying the governor-elect "remains opposed to work requirements, but is pleased to know that hundreds of thousands of Michigan residents currently covered under Medicaid will continue to receive their coverage. She looks forward to examining all options to strengthen Medicaid after she takes office on Jan. 1."

Emily Schwarzkopf, senior policy analyst for the Michigan League for Public Policy, which opposed the proposal, said Whitmer has little choice but to implement it while looking for ways to ensure that people don't get penalized for simply misunderstanding or under-reporting their activities.

"We want to make sure we do it right. We've seen Arkansas has had its (program) in effect for a couple of months and we've seen thousands of people lose their coverage," said Schwarzkopf, referring to reports that many have lost their insurance not because they're necessary unemployed but because they simply didn't or couldn't report their hours or their efforts to find work.

She also said Whitmer's coming into office could provide an opportunity for her to work with the Legislature to provide more resources for training, jobs and child care to help people meet the requirements.

No one's entirely sure how many people could be affected

Some estimates in Lansing suggest that as many as 54,000 people may eventually lose coverage because of the program, though no one's certain about that number.

Experts have said many low-income people are already working or otherwise meeting the criteria for keeping their benefits -- such as attending school or vocational training, or caring for someone who is incapacitated -- or could qualify as medically frail through a doctor's order. But some of those could still find reporting their hours -- especially if they don't have a computer or a smartphone -- difficult unless communications networks to reach them are put in place.

Then there's the question of lawsuits, which opponents in other states have filed with different degrees of success. For instance, a federal judge halted Kentucky's program, only to see the Trump administration reauthorize it this year.

Considering that the Trump administration approved Michigan's and Maine's programs Friday and recently approved Wisconsin's as well, it appeared it was in a rush to do so before recently elected Democratic governors take office.

At Families USA, a health care advocacy group in Washington, D.C., Eliot Fishman, the group's senior health policy director, said CMS moved ahead with those states' proposals even though implementation in the first state to adopt the program -- Arkansas -- "has been plagued with problems and is likely to be halted by a federal judge next month," and implementation in Kentucky is still pending.

"The Whitmer administration should proceed carefully and keep an eye on these court cases as it works on implementation," Fishman said.

Trump administration sees the program as a winner

While the law caused consternation among Democrats in Lansing and elsewhere, Republicans said it was a necessary means of making sure that people were looking for work. CMS Administrator Seema Verma, in her letter detailing the approval to the state, said, "Michigan's community engagement requirement is designed to encourage beneficiaries to obtain employment and/or undertake other community engagement activities that may lead to improved health and wellness."

Snyder, meanwhile, downplayed the impact of the work rules, saying the change simply "created community engagement requirements that closely mirror current cash and food assistance program work requirements."

Opponents, while expressing their disappointment, said they weren't surprised and that now the hard work of trying to limit its consequences begins.

At the Michigan League for Public Policy in Lansing, President and CEO Gilda Jacobs said the change will affect the state's most vulnerable residents and that policies like this one are "inherently flawed."

"But now that the federal government has approved the waiver, Michigan has to do its best to implement it in a way that minimizes harm," she said.

"Ultimately, these new requirements will not further the goals of the Medicaid program or help low-income individuals improve their circumstances without needlessly compromising their access to care," added Ken Fletcher, advocacy director for the American Lung Association in Michigan.

At the left-leaning Center for Budget and Policy Priorities in Washington, D.C., senior policy analyst Jesse Cross-Call said Michigan "appears poised to move forward with new restrictions ... despite mounting evidence that it will lead thousands of residents to lose coverage, including working people and people with serious health needs."

Contact Todd Spangler at 703-845-8947 or at [email protected]. Follow him on Twitter at @tsspangler.

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