November 21, 2017

Feds Welcome State Proposals to Restrict Medicaid Eligibility

The Florida Policy Institute released a new report, “ Medicaid Premiums and Work Requirements: A Prescription for Higher Costs and Lower Health Care Coverage,” earlier this month. Since then, the federal Centers for Medicare & Medicaid Services (CMS) has given additional signals of its strong support for state proposals to implement new Medicaid eligibility restrictions, like work requirements, making it more difficult for people to obtain or maintain coverage.

In a recent speech, CMS Administrator Seema Verma expressed her disdain for “putting able-bodied adults on Medicaid” and encouraged states to seek Medicaid waivers that would require these individuals “to work, volunteer, go to school or obtain job training.”

Unfortunately, Secretary Verma’s remarks feed into the false stereotype that adults covered by Medicaid do not work. Most non-elderly Florida Medicaid recipients are already working or in a household with a working family member. And those not working have good reasons, such as serious health problems.

In Florida, unlike in Medicaid expansion states, the universe of “able-bodied” adults covered by Medicaid is very small, made up primarily of parents or caretakers of minor children in deep poverty. A family of four in deep poverty has roughly $595 of income per month or less.

Based on experience in other poverty reduction programs, Medicaid work requirements would likely lead to thousands of these parents/caretakers becoming uninsured, even those who are working. The corresponding reporting and verification requirements would make it extremely difficult for beneficiaries to comply. Similarly, people who qualify for an exemption from a work requirement, such as those with disabilities, are highly likely to lose coverage because of bureaucratic barriers. Moreover, program administrators are inadequately prepared to exempt participants from the work requirement for legitimate disabilities, aside from the most obvious cases.

Sadly, this is a fully anticipated outcome for states intending to implement such requirements.  Kentucky, in its request to CMS for permission to impose new Medicaid work eligibility requirements, projects significant declines in Medicaid enrollment during the first year, which substantially grow over time.

CMS also just announced new Medicaid waiver criteria to further “grease the wheels” for states seeking to implement work and other Medicaid eligibility requirements that are not authorized under federal law. Section 1115 of the Social Security Act allows states to waive certain federal requirements to pilot new and innovative models; however, these demonstration projects must further the overall purpose of the Medicaid Act, which is to provide coverage to low income people

It appears that CMS intends to use this process for the exact opposite purpose, to kick people off and deny them access to health care coverage. It’s noteworthy that CMS has eliminated a critical factor used by the previous Administration from its list of new 1115 waiver criteria, whether the proposal will “increase and strengthen overall coverage of low income individuals in the state.”

This new vision for Medicaid is misguided. It’s based on a continuing agenda to erode the extraordinary coverage gains made under the Affordable Care Act. Florida leaders should reject this vision and focus instead on policies to cover uninsured Floridians.

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