Work-oriented requirements in Medicaid plan could hit a snag; feds haven’t approved a plan with such requirements yet

By Melissa Patrick
Kentucky Health News

Gov. Matt Bevin’s plan for Medicaid might not be approved by the Centers for Medicare and Medicaid Services as readily as he suggested, because CMS hasn’t approved any plan that has a work requirement.

Bevin’s plan would require participants to have what he calls “skin in the game” through premiums and a higher level of involvement in their health care, but it also includes a work requirement.

“All able-bodied working age adult members will be required to participate in community engagement and employment activities to maintain enrollment,” says the state’s Medicaid waiver proposal.

“There’s nothing in this that is going to be a surprise to them. There’s nothing that we have not talked to them about,” Bevin said at the news conference. “This has been a good, open dialogue. It’s been in good faith. I’m encouraged by that. This is the kind of thing that makes me confident that they will, in fact, support the waiver that we are requesting.”

But that seems to conflict with background information provided by the U.S. Department of Health and Human Services in response to the announcement. HHS says, “States may not limit access to coverage or benefits by conditioning Medicaid eligibility on work or other activities. This requirement is not new.”

Indiana and other states have made similar requests to require Medicaid recipients to be employed or actively seeking work, and have been denied. Most recently, Arkansas, which is in the process of submitting its new waiver with a “work referral” program, had originally asked about a work requirement and were told that it would not be approved.

“As we have discussed previously, some of your proposals are neither allowable under federal Medicaid law nor consistent with the purposes of the program. . . . Consistent with the purposes of the Medicaid program, we cannot approve a work requirement,” HHS Secretary Sylvia Burwell wrote Gov. Asa Hutchinson in a letter dated April 5.”We can, however, support referrals to programs that can help supplicants increase their connection to the workforce and improve their economic outcomes, goals that we support.”

Arkansas’s new demonstration waiver application says a “work referral” to job training and job search programs will be provided “outside the demonstration” to every Arkansan with no income. In addition, the state will provide information about “work training opportunities, outreach and education about work and work training opportunities through the Department of Workforce Services” to all of the eligible state program beneficiaries. The proposal says this program should help individuals move from the state insurance program to an employee sponsored insurance or private plan.

“You just simply cannot have work requirements in the Medicaid program. It is a safety net program,” said Emily Beauregard, executive director of Kentucky Voices for Health, a coalition of groups that favor federal health reform and the state’s embrace of it. “I don’t expect HHS to accept this waiver as it is written now.”

Jessica Ditto, Bevin’s spokeswoman, stood firm on the administration’s stance that HHS can legally approve Kentucky’s plan under Section 1115 of the Social Security Act.

“1115 demonstration waivers give broad authority to HHS to make changes to the standard Medicaid program,” Ditto said in an email. “No other state has requested what we are requesting, which is a phased in pilot that is not merely a ‘work requirement’, but rather a community-engagement requirement that can be easily satisfied with several activities, including work, volunteer, job training and education.”

The HHS background statement also called into question the monthly premiums that Bevin’s plan would require: “States may not impose premiums or cost sharing at levels that prevent low-income individuals from accessing coverage and care.”

A threat or a promise?

Bevin, who initially opposed then-Gov. Steve Beshear’s expansion of eligibility for Medicaid, boldly said that its continuation depends on whether CMS approves this new plan, saying “If they do not approve this, there will not be expanded Medicaid in the state of Kentucky.”

“In fact, that decision is his decision,” said Rich Seckel, executive director of the Kentucky Equal Justice Center. “States get to decide whether they have Medicaid expansion or not. The scariness of the threat should not be a factor in evaluating the waiver.”

Under federal health reform, Beshear expanded Medicaid to those with incomes up to 138 percent of the federal poverty line, adding more than 400,000 Kentuckians to its rolls. If Bevin holds firm to his statement and the proposal isn’t approved, that many Kentuckians would lose their health coverage.

HHS says it will evaluate the waiver based on the law, and suggests that it might take some time to come to an agreement.

“We are hopeful that Kentucky will ultimately choose to build on its historic improvements in health coverage and health care, rather than go backwards,” Ben Wakana, national press secretary at the U.S. Department of Health and Human Services, said in a prepared statement. “As in other states, we are prepared to continue our dialogue for as long as it takes to find a solution that continues progress for the people of Kentucky.”

Mark Birdwhistell, a University of Kentucky health-care vice president who is Bevin’s special adviser for Medicaid, said the administration hopes to finalize and submit its proposal to CMS around Aug. 1 and get approval by Sept. 30. HHS said that other state’s waivers have taken up to seven months of negotiations after submission to CMS to be finalized.

That long a wait would push the decision well past the November election, in which Republicans are trying to take control of the state House, which would give them full control of the General Assembly as well as the governorship. Abolition of the Medicaid expansion before the election could hurt their chances.

The proposal opens a 30-day comment period, in which the state will hold three public hearings: in Bowling Green June 28, Frankfort June 29 and Hazard July 6.

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