Medicaid Work Requirements Appear to Be Dead

Medicaid Work Requirements Appear to Be Dead

Medicaid Work Requirements Appear to Be Dead

The Biden administration is not letting them go into effect while it has a say.

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About two years ago, Medicaid enrollees in Arkansas were discovering a new reality: if they wanted to keep their health coverage, they would have to navigate a complex, finicky state website every month to report that they were working, in school, or volunteering for at least 80 hours. Arkansas was the first state to ever impose a work requirement on Medicaid coverage, the government-run health insurance program for the poor. After the Trump administration had welcomed states to seek its approval for imposing work requirements in the program, another 18 eventually tried to do the same thing; the administration approved waivers in eight of those states.

But with Joe Biden in the White House, Medicaid work requirements are functionally dead. “At least for now, work requirements are nothing but a failed policy idea and a failed attempt to take a lot of people off Medicaid illegally,” said Kevin De Liban, director of advocacy at Legal Aid of Arkansas.

They haven’t yet been felled for good. But what’s quite clear is that the Biden administration does not seem inclined to let them go into effect while it has a say.

In February, shortly after Biden was sworn in, the Centers for Medicare and Medicaid Services retracted a letter issued under the Trump administration that invited states to apply for work requirement waivers and preliminarily rescinded all of the approvals of such waivers that the prior administration had handed out. CMS later sent new letters to Arkansas, New Hampshire, Wisconsin, and Michigan formally withdrawing approval of the work requirements they had gotten rubber stamped by the previous White House. Advocates expect more such letters to be sent out soon.

Meanwhile, when Congress passed the Families First Coronavirus Response Act in March 2020, it sent states additional federal funding for Medicaid through the entire length of the Covid-19 public health emergency, on the that condition states can’t impose any new restrictions on their programs—including work requirements. The public health emergency is expected to last through the end of this year, and the state most prepared to re-implement a work requirement, Arkansas, will see its waiver expire by the end of the year anyway. Therefore, “I don’t see anything being implemented in the near term,” said MaryBeth Musumeci, associate director at the Program on Medicaid and the Uninsured at the Kaiser Family Foundation.

But a lawsuit over whether these work requirements are legal in the first place has reached the Supreme Court, which agreed to hear the case at the end of last year. The plaintiffs in the case, including clients represented by De Liban, argued that work requirements in Arkansas and New Hampshire violated the Medicaid statute by failing to increase healthcare coverage and, in fact, were instead motivated by a desire to push people off the program. “Their intent was to turn Medicaid from a medical assistance program into a work program and thereby cut the Medicaid rolls,” said Jane Perkins, legal director at National Health Law Program, which is also representing plaintiffs in the case. That would seem to run afoul of one of Medicaid’s central goals: helping get more Americans insured.

Some lawmakers argued that work requirements wouldn’t take away healthcare coverage because people would be incentivized to get jobs that offered commercial insurance. But “that’s just a joke,” Perkins said. Many of the Medicaid recipients subject to the work requirement who I spoke to in Arkansas while it was in effect had disabilities or other hindrances that kept them from full-time employment and said they would simply have to go without coverage.

Meanwhile, the federal government has to follow specific rules under the Administrative Procedure Act to issue new regulations, such as brand-new Medicaid waivers, and the plaintiffs argued that, in ignoring evidence that work requirements would almost certainly lead people to losing coverage, former CMS Secretary Seema Verma didn’t follow the right procedure.

The case “was very straight forward,” Perkins said. And lower courts didn’t conflict in their assessments. A federal judge agreed with the plaintiffs in 2019, immediately halting Arkansas’s program, as did a unanimous three-judge panel of the D.C. Circuit Court of Appeals in February 2020. So it surprised some that the Supreme Court agreed to hear the case at all.

The court has received all the briefs it needs from the parties, but in April it removed oral arguments from its calendar and said it would hold the case in abeyance, essentially pausing it for the time being. Biden’s solicitor general has asked the court not to rule on it and to send it to the Department of Health and Human Services to resolve. But the court hasn’t taken any action since the case disappeared from its calendar. So what’s it planning to do? “That’s the big open question,” Musumeci said.

There’s no time left for the court to hear it this term, but it could decide to do so in the fall. Anything is possible, advocates say. But there doesn’t seem to be a lot of motivation for the court to weigh in. The Biden administration has done nearly everything it can to make the case appear more or less moot. The Centers for Medicare and Medicaid Services “is steadily removing any basis for them to say that there’s a live case for them to hear,” said Eliot Fishman, senior director of health policy at Families USA. “These waivers are not going to be approved and in existence regardless of what the Supreme Court does.”

But just because it would be “clearly inappropriate,” as Fishman put it, for the court to rule on the case, doesn’t mean it won’t, especially with such a large and extreme conservative majority.

In the meantime, some states are not going down without a fight. Arkansas and Georgia responded to the Biden administration’s preliminary withdrawal of their waivers with combative letters, and Arkansas has gone so far as to appeal its formal rescission. Fishman sees that move as “totally tied to trying to keep an issue alive for the Supreme Court.” Without Arkansas keeping the fight going, it makes even less sense for the court to weigh in on the matter.

Joan Alker, executive director of Georgetown University’s Center for Children and Families, sees no reason why these state challenges will succeed. Waivers “are supposed to be experiments,” she said. “They are at the discretion of the secretary and both sides have to agree to them.” There’s no statutory right to impose work requirements on Medicaid recipients if CMS doesn’t agree with it.

But Arkansas isn’t done. The legislature has to renew and refund its Medicaid expansion every year, and as part of this year’s version, it passed a bill with a revamped work requirement that ties private insurance—which is what it previously offered to all those eligible under its Medicaid expansion—to work, school, or volunteering. If someone can’t or won’t meet it, she would instead be pushed onto state-run Medicaid. But the Biden administration would have to sign off on such a program, and there’s little reason to believe it would. And if it did, “it would get challenged in court again,” Fishman said.

If and when a Republican takes the White House someday, he or she could decide to revive the issue. But Fishman thinks that the Trump-era experience has changed the conversation permanently. Over 18,000 people lost Medicaid coverage in Arkansas due to the state’s work requirement before it was halted, with no discernable impact on employment. “It just did not seem to work well on its own terms,” Fishman said. It was also an expensive endeavor, costing state resources to implement and track.

“Republican governors have gotten the sense that there are a lot of problems,” he said. “I don’t think we’re going to see a return of [the] originally structured work requirements.” Michigan, New Hampshire, and Wisconsin didn’t even put up a fight when the Biden administration told them that their waivers were over.

Nebraska was the only other state, besides Arkansas, actively considering a form of a work requirement this year. Governor Pete Ricketts had been pushing a system in which Medicaid enrollees would have to work, volunteer, or do other specified activities for at least 80 hours a month, and report those activities to the state, in order to get the full range of benefits, including dental, vision, and over-the-counter medicine. But on June 2 state officials dropped that plan and said all enrollees would get the full suite of benefits.

If a Republican assumes the White House, and work requirements come roaring back into favor, advocates are just as committed to challenging them, “making sure that these kind of illegal policies don’t take effect and certainly that they don’t become any sort of accepted norm,” De Liban said.

The debate over whether aid to the poor should be contingent on their employment isn’t over, by a long shot. Republicans have lately focused their ire on enhanced unemployment benefits, arguing that they are incentivizing people to drop out of work and harming the economic recovery. And Fishman noted that as long as Medicaid is seen as a handout, not as part of a robust healthcare system that treats coverage as a human right, “it is vulnerable.”

But for now, at least, the people who rely on Medicaid to take care of their health can breathe easier.

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