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Trump storms ahead with Medicaid work rules, even though they’re disastrous for enrollees

Trump storms ahead with Medicaid work rules, even though they’re disastrous for enrollees
Centers for Medicare and Medicaid Services Administrator Seema Verma, who is overseeing approval of work requirement for the program, listens admiringly to President Trump during a White House meeting in 2017. (Evan Vucci / Associated Press)

Ignoring empirical evidence that it’s fomenting a healthcare catastrophe, and a federal judge’s warning that it’s legally out of line, the Trump administration has quietly reapproved a punitive work requirement for Medicaid clients in Kentucky.

The approval came just before the Thanksgiving holiday. That’s timing you use only in the hope that you’ll be able to sneak through a policy without anybody noticing.

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But this is such a cynical and malevolent policy that healthcare advocates did notice. That happened partially because data from Arkansas, the only other state given permission by the Centers for Medicare and Medicaid Services (CMS) for Medicaid work requirements, show that its system is throwing residents off Medicaid by the thousands.

This demonstration is designed to extend coverage.


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In its approval letter to Kentucky, the CMS “gives no indication that it considered, much less cared about, the ever-mounting disenrollments in Arkansas,” Andy Schneider, a healthcare policy expert at Georgetown University, observed Wednesday. “Of course, this is hardly surprising,” he wrote, because Health and Human Services Secretary Alex Azar and CMS Administrator Seema Verma “have been thoroughly transparent about their intention to promote work requirements in Medicaid regardless of the coverage losses that such requirements cause.”

The Kentucky reapproval is certain to be challenged in court, because the program is essentially identical to a program overturned by a federal judge in June, writes Judith Solomon of the Center on Budget and Policy Priorities. The judge’s action was partially based on the recognition that Kentucky’s rules undermine the legal objective of Medicaid, which is to bring coverage to its target population. The administration “still didn’t show how a waiver that would take coverage away from beneficiaries who don’t meet a work requirement, pay premiums, or report changes or renew their coverage on time could possibly advance Medicaid’s objectives,” Solomon notes.

Work requirements for Medicaid have become a favored weapon wielded against the program by conservatives. Their particular target is the expansion of Medicaid under the Affordable Care Act. The ACA opened Medicaid to low-income childless applicants for the first time, as a means of bringing health insurance to the neediest Americans. If work requirements were imposed nationwide, according to a survey by the Kaiser Family Foundation, as many as 4 million Americans could lose access to Medicaid — as much as 17% of the 23.5 million people covered by Medicaid expansion. Most of those are already working, but would lose eligibility because they can’t navigate the red tape involved in reporting their work hours.

Kentucky, which stood as a success story for ACA-enabled health coverage expansion under Democratic Gov. Steve Beshear, reversed itself after the election of tea party Republican Matt Bevin in 2015. Bevin campaigned on the promise to end Medicaid expansion, but he backed off once he took office and discovered that the program was more popular than he supposed. Instead, he moved to place onerous restrictions on Medicaid access for Kentuckians.

Beyond the work requirements, Bevin’s plan included several other provisions that had always been vetoed by previous federal Medicaid administrators. Among them were premiums of up to 4% of income and “lock-out” periods of up to six months for failure to meet the work rules.

As a team from the Kaiser Family Foundation reported in January, after Medicaid first approved Bevin’s plan, years of research showed that coverage expansion results when the enrollment process is simplified and streamlined, not when it’s made more opaque and complex, as Kentucky proposes. Under Beshear, the foundation reported, the uninsured rate for Kentucky adults below the age of 65 fell from 16.3% in 2013 to 7.2% in 2016, “one of the largest reductions in the country.” By fiscal 2016 nearly 462,000 adults were enrolled in expanded Medicaid, a success story Bevin evidently couldn’t stomach.

U.S. District Judge James Boasberg of the District of Columbia threw out Bevin’s plan in June, when he ruled that Azar had rushed approval of the work requirements without seriously considering the state’s projection that 95,000 of Kentucky’s 1.2 million Medicaid enrollees would lose their eligibility within five years under the new rules.

Boasberg labeled Azar’s action “arbitrary and capricious.”

Still, the agency’s reapproval, which went out under Verma’s letterhead, addressed Boasberg’s concerns cosmetically at best. Though the program is virtually identical to the one Boasberg rejected, Azar and Verma strained to show that they now had considered the prospect of 95,000 Kentuckians losing eligibility, and found that they didn’t matter.

Their rationale is that Bevin had threatened to terminate Medicaid expansion if the work rules weren’t approved. “The Governor has indicated … that Kentucky will reconsider the ACA adult eligibility expansion if the Commonwealth is unable to implement the demonstration project.” That would mean the loss of coverage for 454,000 individuals, the government said. Even if 95,000 members lose their coverage because of the work rules, “that figure is likely dwarfed by the 454,000 newly eligible adults who stand to lose coverage” if Bevin makes good on his threat.

There’s a term for Bevin’s position. It’s “extortion.”

Kentucky’s program requires Medicaid enrollees to complete 80 hours a month of “community engagement,” which encompasses job-hunting or service with a nonprofit, but on the whole is merely a weasel term for work. Enrollees who fail to report the required hours will be locked out of coverage for anything from a week or so to as long as six months.

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The HHS approval letter bristles with cynical subterfuge. It terms the Kentucky program a “demonstration” aimed at showing whether the restrictions work, a blunt admission that HHS is happy to place the state’s poorest citizens in the role of guinea pigs. Ludicrously, HHS declares that “this demonstration is designed to extend coverage.”

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It repeats the canard that working promotes good health, so forcing people into the workforce is for their own good. The truth is just the reverse — good health enhances the ability to get and keep a job, so placing an obstacle in the path of people seeking medical care threatens their ability to enter and stay in the workforce.

What’s most significant about the approval document is what it doesn’t say. The letter mentions that HHS received more than 8,500 comments on the Kentucky proposal in the 30-day comment period it opened after Boasberg’s ruling, “the vast majority” of which opposed all or part of the Kentucky plan. The letter doesn’t cite a single comment in favor of the plan.

Nor does the letter incorporate the experience of Arkansas, which implemented its work requirement June 1, while Boasberg was still pondering the Kentucky case. As I reported in September and has been confirmed repeatedly since then, the Arkansas program has been disastrous for that state’s Medicaid population.

The program is so bad that it alarms the Medicaid and CHIP Payment Access Commission (MACPAC), a government panel charged with making recommendations to federal and state governments about how Medicaid serves its target groups. MACPAC members asked Azar in a Nov. 8 letter to halt disenrollments in Arkansas, because the state program wasn’t structured “in a way that provides individuals an opportunity to succeed, with high stakes for beneficiaries who fail.”

Azar effectively ignored the letter, bulling ahead with the Kentucky approval just two weeks later. In addition to Arkansas and Kentucky, HHS has approved Medicaid work requirements in Indiana, New Hampshire and Wisconsin, with approvals pending for Alabama, Arizona, Kansas, Maine, Michigan, Mississippi, Ohio, South Dakota and Utah.

As of Nov. 1, according to Arkansas officials, 12,277 Arkansans have lost coverage because of the rules, out of 321,000 adults in the expansion group and 69,000 specifically subject to the work reporting rules. Of the latter, about 54,000 were automatically exempted from reporting their work hours because the state had sufficient information about them in its databases, according to Georgetown.

That left about 15,000 required to report their work hours themselves, of whom 12,277 failed to make the reports. They’ve lost coverage until at least Jan. 1, because they failed to report for three months in a row. Worse, an additional 6,000 are on the cusp of losing their coverage because they’ve missed two months of reporting already.

These people aren’t necessarily violating the rules because they’re slackers or layabouts. Most likely it’s because Arkansas has gone out of its way to make the reporting process difficult. As a lawsuit in federal court points out, Arkansans can report their work hours only through an online portal that requires an email address, password and a code provided to enrollees by mail. The portal operates only from 7 a.m. to 9 p.m., and is often shut down even during those hours for maintenance.

The state decided not to allow people to report their hours by phone or in person, the state’s Medicaid official said, because “we would have to hire so many people — and that just doesn’t make sense.”

Indeed, the MACPAC letter was especially critical of the limitation to online reporting, the lack of outreach to the target population to make sure they understood the new rules, and the utter absence of job development or work programs in Arkansas to help residents meet the rules.

Even if the web portal were a model of efficient implementation, it would still bypass thousands of residents, because a large proportion of low-income Arkansans have no broadband service at their homes or are unfamiliar with online programs or both. (The state ranks 46th in the nation for internet access.)

Arkansas Gov. Asa Hutchinson, the mastermind of this benighted plan, blames the victims. Some "simply chose not to comply," he has said. “Personal responsibility is important.”

He’s blowing smoke, as are Azar and Verma. Their programs aren’t designed to “extend coverage” as they claim, but narrow it. Their goal is to save money, and if that means sentencing the nation’s lowest-income residents to lives of poor health and joblessness, to them that’s just gravy.

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