Medicaid Work Requirement Risks Tripping Up Caregivers, Disabled

The prospect of a national Medicaid work requirement is prompting concern from health policy watchers that future cost savings will come at the expense of caregivers, people with disabilities, and additional beneficiaries who would otherwise be exempted from the mandate.

House Republicans on Thursday passed a tax and spending bill (H.R. 1) that includes a series of changes aimed at cracking down on perceived wasteful spending in the Medicaid program. An estimated $273 billion of the bill’s nearly $800 billion in appraised health-care savings will come from requiring adults ages 19 to 64 to complete 80 hours per month of “community engagement” through work, school, or community service.

The work requirement would be the largest statutory change to the Medicaid program since the Affordable Care Act allowed states to expand eligibility to adults with incomes up to 138% of the federal poverty level. If passed, the Urban Institute estimates that 5.5 to 6.3 million individuals would lose coverage.

Although the bill, which now goes to the Senate, would exempt work requirements for individuals with disabilities or chronic medical conditions, parents, or caregivers, it doesn’t exempt these populations from having to periodically verify their eligibility for the Medicaid program.

All states would be required by Dec. 31, 2026, to verify employment history for the month preceding a Medicaid beneficiary’s enrollment and eligibility redetermination.

In addition, individuals who believe they aren’t subject to work requirements would have to verify their exemptions.

Former Centers for Medicare & Medicaid Services Administrator Chiquita Brooks-LaSure said the reporting process could cast a net drawing in beneficiaries meeting work exemptions, leading to greater administrative burden and possible coverage loss for already disadvantaged communities.

“This is really important to understand with work requirements. Even if people think that the requirements are reasonable, they can end up hurting the people who now need to go through this process periodically,” said LaSure.

“Often, you have to keep proving that you meet that level of disability. So that’s where someone has filled out the paperwork, but it may not be that they are permanently exempted. If someone else is trying to make sure that their brother, their parent, their child, is meeting the requirements, it is going to be burdensome,” she said.

Verifying Work Exemptions

Health policy analysts say the bill’s ambiguity on reporting requirements could lead to considerable variation in how states verify work exemptions.

“There’s nothing specific in the legislation that says that there’s a long-term exemption,” said Robin Rudowitz, vice president at the health research firm KFF and director of its Program on Medicaid and the Uninsured.

“There are provisions of who is exempted from the work requirements that are listed in the legislation, but there needs to be additional guidance,” she said.

Although the bill offers states the possibility of using data sources like payroll information to automatically verify compliance with work requirements, a sizable number of beneficiaries who qualify for exemptions could still be required to manually demonstrate their eligibility, said Leonardo Cuello, a research professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.

He points to Arkansas’s 2018 community engagement Medicaid demonstration waiver as a case study for how a national work requirement could play out.

During the nine months the program was operational, over 18,000 people lost coverage, many of them beneficiaries who would have otherwise qualified for an exemption if they were not required to comply with onerous and confusing reporting requirements.

For example, although students were exempted for six months, other types of beneficiaries—such as those suffering from substance use disorder, caring for an incapacitated person, and those deemed medically or mentally unfit for unemployment—received exemptions as short as two months before they had to provide additional documentation, said Laura Harker, senior policy analyst at the Center on Budget and Policy Priorities.

Collateral Damage

Cuello says it’s likely that verifying exemptions on a national scale would be nearly impossible to implement without incurring similar levels of collateral damage.

“Part of the challenge here, like in Arkansas, is how do you prove that you’re caring for your sick mother? Who do you exempt from the disability group?”

“If you do something super narrow, like anybody who has a Social Security disability diagnosis, that’s going to be a very narrow group of people who can demonstrate that. It’s going to exclude all kinds of people from debilitating diseases or chronic illnesses,” Cuello said.