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Trump Administration Plan to Add Medicaid Work Requirement Stirs Fears

Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

The Trump administration’s recent endorsement of work requirements in Medicaid and increased state flexibility is part of broader strategy to shrink the fast-growing program for the poor and advance conservative ideas that Republicans failed to get through Congress.

Seema Verma, administrator of the Centers for Medicare & Medicaid Services, laid out her vision for the state-federal program in two appearances last week, saying her new course give states wide latitude over eligibility and benefits.

In a speech Nov. 7 to state Medicaid directors, Verma said the program needs to give people “hope that they can achieve a better future for themselves and their families, hope that they can one day break the chains of generational poverty and no longer need public assistance.”

She has noted other government assistance programs such as food stamps, have similar requirements.

But her outline scares advocates who see the changes as a way for states to kick millions of adults off the program and undermine its mission of providing health coverage to the poor. They note most nondisabled adults on Medicaid already work. Many who don’t are either too sick, go to school or care for relatives.

“Medicaid coverage is not something that should be earned,” says Robert Doherty, senior vice president at the American College of Physicians. “Medicaid is not a welfare program. It is a health care entitlement program, and anyone who meets the requirements should be able to have coverage.”

Verma’s plan to greenlight work requirements is only just the beginning of dramatic changes, these advocates said. They expect that she would allow more states to charge monthly premiums, as Indiana has proposed; approve drug testing of enrollees, as Wisconsin has requested; and putting a time limit on coverage, as Arizona has asked.

Katherine Howitt, associate director of policy at the Community Catalyst, a consumer health advocacy group that backs the federal health law and  expansion of Medicaid, said Verma has thrown open the door to allowing states to add more restrictions on coverage.

“This new approach is not really about promoting work or improving care or improving state flexibility,” she added. “At the end of the day, it is making it harder for low-income people to access health coverage.”

Nearly 75 million people are covered by Medicaid, including 16 million added since 31 states and the District of Columbia expanded their programs under the Affordable Care Act.

Verma says her goal for Medicaid is to move people out of the program by getting them into jobs that offer coverage or provide enough income so they buy it on their own.

“Her comments show she doesn’t understand the reality that many low-wage jobs don’t offer benefits,” Howitt says.

Several states, including Arkansas, Kentucky and Maine, have asked CMS to allow them to require Medicaid recipients to work or do volunteer work as a condition of enrollment. The Obama administration turned down such proposals.

Even some right-leaning pundits say work requirements could backfire because taking away health coverage could make individuals sicker and less likely to hold down jobs.

“This could run counter to the goal of Republicans to help put people to work,” says Jason Fichtner, a health policy expert at the conservative Mercatus Center at George Mason University in Fairfax, Va.

But Josh Archambault, senior fellow for the conservative Foundation for Government Accountability, says he was encouraged by Verma’s approach.

“I think the intent of the program depends on different populations it serves,” he says. “For someone in a nursing home, it’s a health program. But for people in the Medicaid expansion, it is more like a welfare program where able-bodied people are expected to move back into the workforce.”

Congress, with the blessing of President Donald Trump, tried earlier this year to make substantial changes to Medicaid as part of the bills to replace the ACA. Those efforts stalled.

The changes included offering states more flexibility, but federal funding would not be as generous. The nonpartisan Congressional Budget Office says millions fewer people would eventually be covered.

Verma, a former health consultant who helped Indiana expand Medicaid in 2015 under Obamacare, says the law should never have allowed so-called able-bodied adults into the program. That’s because Medicaid already had too many problems, including not enough doctors and wait lists for some people seeking coverage, she says.

Before the ACA, Medicaid mainly covered children, disabled people and pregnant women.

The health law broadened Medicaid to all low-income people, opening up the program to cover nondisabled adults without children with incomes up to 138 percent of the federal poverty level (about $16,600 for an individual).

“We put people on the Medicaid program — able-bodied individuals — in a program that is essentially designed for people that are going to be on the program for the rest of their lives,” Verma said Nov. 9 at an event sponsored by The Wall Street Journal.

Two-thirds of people on Medicaid are disenrolled within three years, according to a U.S. Census Bureau report.

Verma’s pointed criticism of Medicaid, the Affordable Care Act’s expansion and even state officials who helped implement that effort drew rebukes from state Medicaid directors.

Critics say her remarks were misguided and showed she doesn’t understand the program she runs.

Doherty says that by law Medicaid allows states to conduct experiments in how they run the program, but not by making it harder for people to get covered.

Nothing stops states, he added, from offering job training and other programs to help people on Medicaid get back to work. “But we can’t deny them access to health care just because they happen to be poor,” he says.

Robin Rudowitz, a Kaiser Family Foundation policy analyst, says Verma appears willing to let states experiment as never before.

“Some proposals [like work requirements] could create barriers to coverage for eligible beneficiaries and result in losses of coverage for Medicaid enrollees,” she says (Kaiser Health News is an editorially independent program of the foundation).

Some health experts say they see many contradictions in Verma’s approach. They said she wants Medicaid to focus only on the most needy — but she has been unwilling to criticize Congress for failing to reauthorize the Children’s Health Insurance Program (CHIP) that covers 9 million children. Federal CHIP funding ran out Sept. 30.

Verma also questioned why some states spend significantly more per enrollee than other states on Medicaid. But the reason, these experts note, is because states have flexibility to vary their benefits, eligibility rules and payments to providers.

As Medicaid has grown to cover more than one in five Americans, it has become more popular among beneficiaries, health care providers and even among some Republican governors who agreed to expand it. Howitt says the Trump plan would take Medicaid back to the 1980s when it was often linked to cash assistance welfare and carried a stigma.

Joan Alker, director of the Georgetown University Center for Children and Families, says backing work-requirement proposals helps the Trump administration further its ideological message that Medicaid is a welfare program and not a health program.

Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities, which supports the ACA, says Verma’s vision is simple: to undo the health law’s coverage gains.

“In 2010, Congress decided to expand Medicaid as the vehicle for low-wage workers to have coverage as part of health reform,” she says. “That is still the law and she [Verma] doesn’t get to disagree with that, she has to follow the law not sabotage it.”