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HHS Revokes Medicaid Work Requirements in Arizona, Indiana

June 25, 2021, 10:24 PM

The Department of Health and Human Services continued its attack on work requirements in state Medicaid programs, informing Arizona and Indiana that it is withdrawing approval for must-work provisions approved during the Trump administration.

Requiring poor adults to work as a condition of receiving health care would likely decrease Medicaid enrollment without increasing employment, and would be especially inappropriate during the Covid-19 pandemic, the HHS said in the Thursday letters to Arizona and Indiana.

The move came three months after the HHS took similar action against Medicaid work requirements in Arkansas and New Hampshire, which also are defending work requirements in their Medicaid programs in a case that is pending before the U.S. Supreme Court.

The court put that case on hold in early April, but hasn’t taken action on a motion from the Justice Department to send it back to the HHS without a ruling.

“I’m disappointed the federal government has withdrawn approval of our Gateway to Work program, which had the potential to help so many Hoosiers,” said Indiana Gov. Eric Holcomb (R) in a statement. “We’ll continue to support the health and well-being of Hoosiers, and our participants will receive much needed job training and career support to help them transition from Medicaid to full employment.”

Trump Priority

Work requirements in the Medicaid program were an important priority of the Trump administration for the Section 1115 waiver program, which allows states to try out experimental approaches to delivering care and payment in the Medicaid program.

The HHS in April also revoked work requirements in Michigan and Wisconsin, states in which changes in the governor’s mansion led to a reversal of position on work requirements that had been eagerly sought by prior administrations. Neither state sought to challenge the HHS decision.

Other states whose work requirements are under HHS review include Georgia, Ohio, South Carolina, and Utah. Nebraska officials said June 1 that the state was dropping plans to include work and wellness requirements in its Medicaid program.

“We are encouraged that the Centers for Medicare & Medicaid Services (CMS) continues to review work requirement waivers approved by the Trump administration,” the National Health Law Program said in a statement Friday.

“These harmful waivers were not consistent with the objectives of the Medicaid Act as they would have resulted in critical coverage loss for low-income people in states across the country,” the group said. “We urge CMS to continue taking these important steps to ensure Medicaid’s goal of furnishing medical assistance to those in need.”

Medicaid is a joint federal-state health insurance program for low-income people.

Appeal Possible

Arizona and Indiana will have 30 days to appeal the determination before the HHS’s Departmental Appeals Board.

Such a move appears possible in the case of Indiana, which defended its work requirements in a letter to the HHS after the department informed the state its work requirements were under review and likely to be revoked.

Holcomb’s statement didn’t mention the possibility of an administrative appeal, and his spokesman declined to address it. A spokeswoman for the Indiana State Department of Health didn’t respond to a request for comment on a possible appeal.

Arizona didn’t reply to a similar letter from the HHS concerning its work requirements. A spokeswoman for the Arizona Medicaid agency, known as the Arizona Health Care Cost Containment System, told Bloomberg Law in April the state was dropping its request for work requirements in negotiating an extension of its Section 1115 waiver.

The agency didn’t respond to a request for comment on the Thursday HHS decision.

To contact the reporter on this story: Christopher Brown in St. Louis at ChrisBrown@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Brent Bierman at bbierman@bloomberglaw.com

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