Are Work Requirements for Medicaid Legal? Some Say No

Medicaid recipients in Kentucky may soon face work requirements as a condition of enrollment – unless Democratic senators have their way. In a letter dated January 18, 29 Democratic senators expressed concerns over the legality of a recent State Medicaid Director Letter issued by the Centers for Medicare and Medicaid Services (CMS) on January 11. That letter encouraged states to submit 1115 waivers under Medicaid, which would allow them to expand eligibility guidelines to include “community engagement.” Under the guidelines, community engagement might include requirements for Medicaid beneficiaries to work, volunteer, attend school or complete other approved activities.

Opponents of the new guidelines argue that imposing Medicaid work requirements would put undue burden on the Medicaid population. Now, there’s some question about whether these guidelines meet the intent of the law. Democratic senators, among them Bernie Sanders and Elizabeth Warren, are urging the administration to change its mind about the guidelines.

CMS Administrator Seema Verma believes that imposing community engagement standards, including work requirements, on Medicaid recipients will be beneficial not only in terms of cutting Medicaid costs but in giving Medicaid beneficiaries a sense of purpose, ultimately creating a healthier population of people. Critics argue that healthy people tend to work already and that work itself isn’t a marker for good health.

In response to the legal challenges presented by these Democratic senators as well as the National Health Law Program, which has threatened legal action if work requirements are implemented under the 1115 waiver, Kentucky Governor Matt Bevin has said that he may end his state’s expansion of Medicaid under the Affordable Care Act. Under Obamacare, states have the option to expand Medicaid to people earning up to 133 percent of the federal poverty level. Gov. Bevin signed an executive order on January 12 instructing the Health and Family Services Cabinet to end Medicaid expansion if courts block Kentucky’s new Medicaid guidelines.

Questions of legality hinge on the stated intent of the Medicaid law, which was written in 1965. States are allowed to apply for a 1115 waiver to implement their own changes to the law since it’s a joint state and federal effort, but states have yet to enact work requirements in the program’s 50-year history. Opponents fear that requiring Medicaid recipients to work would undermine the intent of the law and bar access to low-income recipients.

Kentucky’s new Medicaid guidelines will require Medicaid recipients to complete 80 hours a month of community involvement, which can include work. The new plan also requires recipients to pay $15 a month for their healthcare and will eliminate vision and dental benefits unless beneficiaries participate in a health rewards program.

Changes to the program will take effect on July 1. Kentucky is the first state to be granted its 1115 waiver for work requirements. Eight additional states have applied for work requirement waivers as of January 12.