UPDATED AT 3:20 P.M.
The Trump administration signaled Tuesday that it would allow states to impose work requirements on some adult Medicaid enrollees, a long-sought goal for conservatives that is strongly opposed by Democrats and advocates for the poor.
“Let me be clear to everyone in this room: We will approve proposals that promote” employment or volunteer work, Seema Verma, the head of the Centers of Medicare & Medicaid Services (CMS) said in a speech to the nation’s state Medicaid directors.
Such a decision would be a major departure from federal policy, and critics said it would lead to a court fight. President Barack Obama’s administration ruled repeatedly that work requirements were inconsistent with Medicaid’s mission of providing medical assistance to low-income people.
“The thought that a program designed for our most vulnerable citizens should be used as a vehicle to serve the working-age, able-bodied adults does not make sense, but the prior administration fought state-led reforms that would’ve allowed the Medicaid program to evolve,” Verma said.
“For people living with disabilities, CMS has long believed that meaningful work is essential to their economic self-sufficiency, self-esteem, well-being and improving their health,” she added. “Why would we not believe that the same is true for working-age, able-bodied Medicaid enrollees?”
Verma also blasted the Affordable Care Act, saying the health law’s efforts to give coverage to so-called able-bodied adults was a mistake because it resulted in “stretching the safety net for some of our most fragile populations,” such as children, pregnant women and people with disabilities. It also has added to the problems for Medicaid enrollees getting access to care, she said.
The speech got a cool reception from the state directors. None of her comments brought immediate clapping from the nearly 1,000-person audience, but there was polite applause at the end.
Eight states — Arizona, Arkansas, Indiana, Kentucky, Maine, New Hampshire, Utah and Wisconsin — have submitted requests to CMS seeking to require nondisabled Medicaid enrollees to either work or provide community service.
The proposed work requirement rules vary by state. Arizona calls for enrollees to be working, seeking work or attending school or job training for at least 20 hours a week.
New Hampshire would require enrollees to work, engage in job training or acquire education for more hours the longer they are in Medicaid. For example, they would put in 20 hours a week the first year they were enrolled, 25 hours the second year and at least 30 hours in their third year.
Verma did not say when she would rule on the pending applications, but one CMS official said it would likely be before the end of the year.
The Medicaid chief said she wants to give states more flexibility as CMS officials “reset the federal-state relationship, and restore the partnership,” so that Medicaid “is sound and solvent and helps all beneficiaries reach their highest potential.”
Kentucky expects to get a green light from CMS and plans to implement the mandate by July, said Stephen Miller, the state’s Medicaid director. “We were in sync with what she had to say” about work requirements, he said.
He said that even though the state’s Medicaid rolls have soared to cover 33 percent of residents, Kentucky still has high rates of cancer, smoking and obesity. “We have to try something else,” he said. “We need to do more than just help people access health care.” The move would also help the state save money, he added.
Allison Taylor, Indiana’s Medicaid director, said a work requirement would help the state find the nearly 1 million workers it is estimated to need by 2025.
Studies show the vast majority of Medicaid enrollees are already working, looking for work, going to school or caring for a relative.
About 59 percent of nondisabled adults on Medicaid who are under 65 do have jobs, according to the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)
Verma said the Obama administration was wrong when it denied states’ requests to implement work requirements, also known as community engagement mandates. “Believing that community engagement requirements do not support or promote the objectives of Medicaid is a tragic example of the soft bigotry of low expectations consistently espoused by the prior administration,” she said. “Those days are over.”
New York Medicaid Director Jason Helgerson said the speech created an “us vs. them” scenario. “To suggest that the work we do is some form of bigotry is disgusting,” he said.
While he welcomed more flexibility from CMS toward states, Helgerson said the ACA has been a boon to New York and there is no evidence of people having longer waits for care since the expansion.
Verma decried the Obama administration’s emphasis on Medicaid enrollment. “While many responded to this expansion with celebration, we shouldn’t just celebrate an increase in the rolls, or more Medicaid cards handed out,” she said. “For this population, for able-bodied adults, we should celebrate helping people move up, move on and move out.”
Several Medicaid directors said they were upset that Verma suggested they care only about adding people to Medicaid rolls. “We do so much more than that,” said one Medicaid director, who refused to be named because of concerns about working with CMS.
More than 16 million people have been added to Medicaid since 2013, mostly as a result of 31 states and the District of Columbia expanding eligibility under the federal health law.
States and the federal government split the costs of the $576 billion Medicaid program, which covers 74 million people. States are allowed to set benefits and eligibility rules within broad federal guidelines.
Since the 1990s, the federal government has increasingly allowed states to temporarily waive Medicaid rules to give states the ability to experiment with how they administer the program. States have used those options for efforts such as adding monthly premiums or customizing their expansion of Medicaid under the 2010 Affordable Care Act.
Two long-term requirements of such waivers are that they do not increase federal costs and they improve health coverage of the poor.
CMS said Tuesday that expanding access is no longer a key purpose of federal Medicaid waivers. That would be a philosophical change in the program that would open the door to approve work requirements, which states acknowledge would reduce the number of people enrolled.
“It tells me that the agency is preparing to disavow a central objective of federal law and instead will attempt to accomplish exactly what the law does not countenance, namely, a reduction in the level of assistance available to the poorest and most medically vulnerable Americans,” said Sara Rosenbaum, a health policy and law professor at George Washington University in Washington, D.C.
Verma’s decision had been widely expected. Before being appointed to CMS, she was a health care consultant, and she helped the Indiana and Kentucky Medicaid programs draw up their waiver requests, including work requirements. To avoid a conflict, CMS said Verma will not be involved in decisions on those two states.
A decision to support work requirements would likely end up in a court battle, said Jane Perkins, legal director of the National Health Law Program, an advocacy group. Perkins said CMS has power to allow states to experiment with the Medicaid program but not by curtailing eligibility.
“This is really a change in the complexion of the Medicaid program, where CMS is saying to states, ‘Come tell us what you want to do and if you want to cut back the program, we will give you the go ahead,’” Perkins said. “That is inconsistent with congressional intent” of Medicaid waivers.
Verma’s address to the National Association of Medicaid Directors meeting in Arlington, Va., marks one of her few public appearances since taking office. Despite overseeing both Medicaid and Medicare — programs that affect more than 120 million Americans — she has given few interviews or public speeches.
She has frequently been mentioned as a possible replacement for Health and Human Services Secretary Tom Price, who resigned in September following allegations of wasteful travel spending.
Verma’s speech came after an announcement by CMS on Monday that it would streamline the often-arduous process to get Medicaid waivers. It offered to fast-track some requests and said it would allow states to get waivers for up to 10 years — five more years than currently allowed.
Verma also said the federal government would release scorecards showing Medicaid outcomes, but she gave no details on what measures would be evaluated. Some state officials fear CMS will use the new grading measure to lower their federal funding.
Most Medicaid enrollees are in private managed care plans, which get evaluated each year by states, looking at everything from vaccination rates for children to cancer screening rates for adults.