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Work Requirements and Waivers Could Lead To Medicaid Reform Compromise

Work Requirements And Waivers Could Lead To Medicaid Reform Compromise

The Trump administration’s announcement that it will entertain work requirements for eligibility for Medicaid is just one small example of the huge political gulf that exists on reforming Medicaid policy nationally. But it could eventually lead to compromise on Medicaid.

Seema Verma, the administrator of the Centers for Medicare & Medicaid Services (CMS), announced last week in a 10-page memo that states could establish work requirements as a condition of Medicaid eligibility. She said 10 states have asked for work requirements to be included in waivers. Shortly after the announcement, approval was given to Kentucky’s request. Interestingly, the Kentucky waiver also included premiums on some expansion populations.

Democrats and advocates immediately condemned the move, some of them predicting nothing short of Armageddon. We believe strongly that everyone should always have affordable access to healthcare. Coverage is important to address the huge costs and low quality of healthcare in America. At the same time, we think that what the administration proposed was a fairly reasonable approach to the issue based on existing work requirement policies in other programs. Only able-bodied individuals would be subject to the rule and, even then, all sorts of non-work activities qualify, such as treatment for opioid abuse, job training, job searching, charity work, and caring for a sick relative. Those formerly in foster care, pregnant women, primary caregivers of a dependent, and full-time students are exempt. The approved Kentucky waiver requires only 20 hours of work a week and allows the alternatives above. Additionally, states need to show how they support efforts for recipients to gain employment and child care.

About 74 million people are enrolled in Medicaid. Just a small percentage of these individuals will be impacted. It should be noted that the muted approach to work in Medicaid looks a lot like the approach former President Obama took when he backtracked from much more formal work requirements in welfare reform. Further, work requirements are part of a number of other federal programs, including SNAP (Food Stamps) and TANF (welfare grants). Individuals meeting work requirements there are deemed in compliance for Medicaid.

Are we in love with the concept? No, but we don’t see this as having huge impact. We don’t expect many states to adopt this approach. And it is possible that the proposal could drive reform overall. Have we lost our minds?

Consider the following: Democrats and Republicans are largely diametrically opposed on where Medicaid should go. Most Republicans, minus some moderates in each house, are not invested at all in the program and refuse to see its long-term value to provide cost-effective care. The House Obamacare bill that passed the House but failed in the Senate would have essentially gutted the program by passing a per capita cap program that too harshly restricts long-term funding. Most Democrats want to keep Medicaid an entitlement and ignore the future crushing costs that threaten its very existence.

It seems forging a consensus on the future of Medicaid will mean everyone giving in a bit. Democrats will want adequate funding well into the future for both medical and long-term care. This could be accomplished with a reasonably flexible and generous per capita cap model (with savings still accrued). At the same time, reform of the system is needed. Republicans will want personal responsibility and cost-sharing measures as well as individual states to fashion their own system.

So, work requirements as well as the administration’s desire to seek reform through waivers is the opening salvo. Could these efforts put enough pressure on Democrats and bring them to the table with Republicans for a lasting compromise? Probably not this year, but it may happen as the GOP reforms roll out.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

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