CMS warns non-expansion states to rethink Medicaid work rules

The CMS worries that some will lose coverage if it approves work requirements in states that haven't yet expanded Medicaid.

The agency has already approved work requirement waivers in Arkansas, Indiana and Kentucky—all of which expanded Medicaid under the Affordable Care Act. The non-expansion states of Kansas, Maine, Mississippi, Utah and Wisconsin are also asking to require Medicaid enrollees to be either working or looking for a job. Tennessee and Virginia are also reportedly planning to submit such requests.

During a news briefing Tuesday, CMS Administrator Seema Verma said she is worried about a "subsidy cliff."

That would happen if a person earns enough to render him ineligible for Medicaid, but it's not enough to qualify him for financial assistance on the individual insurance exchanges, leaving him without coverage.

"Because there is no tax credit for them to move on to the exchanges, what happens to those individuals?" Verma asked. "We need to figure out a pathway, a bridge to self-sufficiency."

Verma did not rule out approving such waivers, but rather emphasized CMS and the states are seeking solutions.

Her remarks come just days after HHS filed a legal brief in the litigation of Kentucky's plan to impose work requirements.

In that briefing, the Trump administration said it viewed work requirements primarily as an option for adults in expansion states. The White House seemed wary on their use for other populations.

"Community-engagement initiative would make little sense for vulnerable low-income individuals likely to need medical assistance," HHS said in the April 26 legal filing. "There is nothing irrational in requiring able-bodied adults who are capable of performing community service, working, or going to school to do so as a condition of Medicaid eligibility."