Wisconsin can impose Medicaid work requirements, time limits, but not drug testing

The CMS on Wednesday gave Wisconsin permission to impose work requirements on beneficiaries. It's the first state to receive a green light for the policy without expanding Medicaid.

Wisconsin also became the first state to win federal approval to impose a time limit on Medicaid enrollment. The CMS, however, denied its bid to require beneficiaries undergo drug testing.

Under a newly approved waiver, Medicaid beneficiaries must document and report 80 hours per month of either volunteering or work-related activities, or risk being kicked out of the program. The mandate won't apply to disabled or mentally ill individuals as well as sole primary caregivers and children.

There will be a new, 48-month, nonconsecutive time limit for enrollees between the ages of 19 and 49 that don't meet the work requirement. After four years, the state will lock enrollees out of coverage for six months.

"This feature of the demonstration provides an important incentive to ensure that beneficiaries are engaged with their communities," CMS Administrator Seema Verma said in a letter Wednesday.

The CMS said it rejected the state's bid to mandate drug testing for Medicaid enrollees after the proposal received significant pushback in public comments.

Advocates argued that the policy would have denied healthcare to ill people simply because they decline the test. That's counter to Medicaid's goal of ensuring access to care for low-income individuals.

Verma has historically expressed reluctance to approve work requirement waivers from non-expansion states due to the so-called subsidy cliff, which occurs when a newly employed enrollee begins to make too much money to be eligible for Medicaid, but still too little to qualify for financial assistance on the health insurance exchanges.

The subsidy cliff won't be an issue in Wisconsin because the state already covers childless adults up to 100% of the federal poverty level. That's different from other non-expansion states which tend to cover adults up to 20% of the federal poverty level.

"With more people working in Wisconsin than ever before, we can't afford to have anyone on the sidelines: we need everyone in the game," Gov. Scott Walker said in a statement. "We want to remove barriers to work and make it easier to get a job while making sure public assistance is available for those who truly need it."

Other approved provisions in the waiver include $8 monthly premiums, mandated health and wellness assessments and coverage of residential treatment for substance use disorders.