CMS approves Medicaid work waivers in Michigan and Maine

The CMS on Friday approved Medicaid work requirement waivers for Michigan and Maine, in what Administrator Seema Verma called an early Christmas gift to those states.

That increases to seven the number of states where the CMS has allowed states to require Medicaid enrollees to work or engage in other "community engagement" activities as a condition of eligibility. More than 10 other states have requested or are considering similar Section 1115 five-year demonstration waivers. Michigan's is the by far the largest state Medicaid program to move to a work requirement. It kicks off Jan. 1, 2020.

"Christmas came early for these Governors & we are proud to support local innovation all across this great country!" Verma wrote in a tweet.

But these waivers are facing legal challenges. A federal judge in Washington, D.C., blocked the CMS approval of Kentucky's waiver, and that same judge is currently hearing a similar challenge to Arkansas' program. Nearly 17,000 Arkansans have been disenrolled this year due to not meeting the new reporting and work requirements.

Maine and Wisconsin are the only two states where the work requirement will apply to the traditional Medicaid population. It only applies to the expansion population in Michigan, Arkansas, Indiana, Kentucky, and New Hampshire.

Michigan Democratic Gov.-elect Gretchen Whitmer opposes the work requirement but likely will try to find a way to minimize resulting coverage losses. It's estimated that the requirement could apply to more than 500,000 of the nearly 655,000 low-income adults in the Healthy Michigan expansion program, and that as many as 54,000 people could lose coverage due to the work and reporting requirements.

In Maine, Democratic Gov.-elect Janet Mills has said she will quickly implement a 2017 voter-approved ballot initiative to expand Medicaid to an estimated 70,000 people. The state likely would have to submit a new waiver request to include the expansion population in the work requirement. But it's uncertain whether Mills would make that request, or even allow the current waiver to take effect.

"We expect that Governor-elect Mills will terminate the waiver and will not allow it to advance," said Robyn Merrill, executive director of Maine Equal Justice Partners, which pushed for the Medicaid expansion. "If she did advance it ... it is our position that the state plan would either need to be amended or a new state plan amendment would be needed."

The Michigan waiver would require non-disabled adults ages 19 to 62 to report at least 80 hours per month of work, training, or volunteer activities to keep their Medicaid coverage. They would lose it if they fail to report the required hours for three months in a 12-month period. They could regain their coverage only after proving they were in compliance.

In addition, beneficiaries with incomes from 100% to 138% of the federal poverty level who have been enrolled in the Healthy Michigan program for at least four years starting in 2014 will have to pay a premium of 5% of their income. Plus, they'll have to complete a health risk assessment or have completed a healthy behavior, such as get a preventive screening within the previous year.

In Maine, Medicaid enrollees would also be required to work or engage in training or community-engagement activities for at least 20 hours per week, and would have to pay monthly premiums. If they failed to meet the requirements for a total of three months within a three-year period, they would lose coverage.

The CMS and Republican leaders in these waiver states argue that the work requirement will improve Medicaid enrollees' health and well-being by pushing them into productive work and educational activities.

But Jesse Cross-Call, a senior policy analyst at the Center on Budget and Policy Priorities, which opposes work requirements, cited the Arkansas experience as a reason to halt these waivers.

"Michigan should reconsider moving forward with its harmful changes or risk joining Arkansas in seeing thousands of low-income adults lose coverage, reversing the state's progress in expanding coverage and reducing uncompensated-care costs."