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HHS Revokes Medicaid Work Requirements in Three More States

Aug. 11, 2021, 10:44 PM

The Department of Health and Human Services continued to unwind Trump-era policy priorities in the Medicaid program, rolling back work requirements in three more states and asking for additional public comments on a demonstration project in Tennessee.

Requiring poor adults to work as a condition of receiving health care would likely decrease Medicaid enrollment without increasing employment, and would be especially harmful during the Covid-19 pandemic, the HHS said Tuesday in letters to Medicaid directors in Ohio, South Carolina and Utah.

The Aug. 10 action brings to a near conclusion the HHS’s efforts to eliminate work requirements in Medicaid in the 12 states that received approval for them during the Trump administration.

The HHS action on the Tennessee demonstration project is more equivocal, but suggests that the Biden administration is open to revising it or throwing it out, said Sara Rosenbaum, professor of health law and policy at the George Washington University Law School.

“There is nothing at all surprising about these actions given the Biden administration’s commitment to protecting and expanding health coverage for low-income people,” she said.

“Work requirements lead to loss of coverage for the most vulnerable people, the research on this is clear. It’s an idea that has lost whatever luster it had, and I don’t think any states are going to want to go down this path now.”

The HHS previously revoked work requirements in the Medicaid programs of Arizona, Arkansas, Indiana, Michigan, New Hampshire and Wisconsin. Kentucky and Nebraska withdrew their applications for work requirements after initially receiving approval.

Georgia is the only remaining state that received approval for work requirements that has not had it formally revoked.

Work requirements for adults in Medicaid were an important policy priority during the Trump administration. Proponents said they would help enrollees make the step to independent living and would promote better health outcomes.

The requirements took shape as demonstration projects under Section 1115 of the Social Security Act.

Tennessee

Tennessee would receive a capped funding amount for its Medicaid program under its Section 1115 waiver, and would be able to redirect a portion of any resulting cost savings to other health programs.

The HHS approved the proposal in the last days of the Trump administration for a 10-year period. Patient groups quickly filed a federal lawsuit challenging the approval, arguing that the public was not given an opportunity to comment, and that the proposal would weaken a Medicaid program that already fails to provide access to needed services.

The decision to open a new comment period shows that the Biden administration has significant doubts about the Tennessee demonstration, Rosenbaum said.

“This waiver would create significant cuts to the Tennessee Medicaid program, and I doubt the Biden administration likes what it sees,” she said. “It incentivizes the state to pursue extraordinary cuts in the program because it gets to share in the savings.”

The comment period will create a record that can be the basis for further action, she said. “The administration appears to want to be sure it has a record that reflects the sentiments about and evidence about such a severe curtailment of the program,” she said.

Right to Appeal

Ohio, South Carolina, and Utah have a right to appeal the HHS action to the HHS Departmental Appeals Board, but initial statements from officials in the states left it unclear whether there is much of an appetite left for a fight over work requirements.

Arkansas is the only state so far to have put up much of a struggle over its work requirements. It fought a lawsuit challenging its work requirements all the way to the U.S. Supreme Court, where the case remains on hold, and it launched an appeal of the HHS decision to withdraw approval for its work requirements.

But Arkansas’s recent application to renew its waiver, set to expire at the end of the year, appears to show that officials there see that the end of work requirements is inevitable.

That application, which was submitted to the Centers for Medicare and Medicare Services in late July, drops work requirements altogether, substituting in their place incentives aimed at encouraging work and other healthy behaviors.

A spokesman for the Utah Department of Health expressed skepticism about the possibility of an appeal, but said no decision had been made.

Ohio Gov. Mike DeWine (R) said in a statement he was disappointed with the decision, but didn’t address the issue of an appeal.

The South Carolina Department of Health appeared to leave open the possibility of an appeal in an Aug. 11 statement. “South Carolina is committed to exploring all options available in order to implement its Healthy Connections Community Engagement Initiative. The South Carolina Department of Health and Human Services will continue to explore this and other opportunities to achieve this initiative’s goal to promote better health outcomes and financial independence for South Carolinians,” it said.

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; Karl Hardy at khardy@bloomberglaw.com

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