The Trump administration and red states haven't given up on curbing Medicaid enrollment and imposing work requirements after recent setbacks, but they are going back to the drawing board to figure out how they can reach their goals.
The fall season hasn't been kind to the administration and its allies, who have sought to require able-bodied Medicaid beneficiaries work, volunteer or search for employment as a condition of coverage. Three judges on the U.S. Court of Appeals for the D.C. Circuit signaled last month that they would jettison work requirement waivers in Arkansas and Kentucky because the CMS didn't take into account their effects on health coverage when it approved the waivers.
"The linchpin is … what the D.C. Circuit does with respect to the ongoing court cases," said Charles Luband, partner and former co-chair of Dentons' healthcare practice.
Both Arizona and Indiana delayed implementation of their work requirements soon after the oral arguments, each citing ongoing litigation as a concern. Andy Beshear, Kentucky's likely new governor, vowed to repeal the state's Medicaid work requirements the day he enters office.
That has led some healthcare experts to question the future of Medicaid work requirements and how conservatives might respond.
"(Work requirements) are not dead, but they're certainly on life support," said Joan Alker, Executive director and co-founder of the Center for Children and Families at Georgetown University's McCourt School of Public Policy. "The reasons for states not to go down this path are piling up."
States have found that putting work requirements into practice can have sizable administrative costs because they involve additional reporting and related infrastructure like new IT investments, according to a U.S. Government Accountability Office report.
It's also not clear that work—or "community engagement"—requirements increase the number of Medicaid enrollees who work. Around 18,000 Arkansans lost their Medicaid coverage and fewer people participated in community engagement activities after the state implemented its work requirement in 2018, according to a study in the New England Journal of Medicine.
"There's nothing about (work requirement) policies that address the barriers people face to work," Alker said.
"There are things that states can do to help promote employment beyond conditioning Medicaid eligibility on work," said Robin Rudowitz, vice president at the Kaiser Family Foundation and co-director for the program on Medicaid and the uninsured.
That could include workforce training programs, connecting Medicaid recipients with community-based education or job-training services or other work supports.
But the GOP has other ideas. Georgia Gov. Brian Kemp unveiled the state's Medicaid expansion plan—Georgia Pathways—on Monday. The proposal would require around 50,000 low-income adults to work, volunteer or take up job training or education for 80 hours per month to receive Medicaid benefits.
Georgia's approach to a Medicaid work requirement is unique because it makes work a precondition for receiving expanded Medicaid coverage in the first place. Until now, states have sought work requirements for re-enrollment or continued coverage eligibility.
"Instead of failing to meet your work requirements being a way that you could lose your Medicaid eligibility, you would never have Medicaid eligibility in the first place," Luband said. "They are trying to avoid some of the legal problems that are at issue in the D.C. Circuit case … I have no idea whether that would pass muster with the courts."
In addition to a work requirement, Georgia Pathways and other red-state Medicaid plans include a wide range of policies that are designed to cut Medicaid spending by limiting enrollment or increasing cost-sharing for beneficiaries. States have tried to restrict enrollment by lowering income thresholds, eliminating who's eligible for coverage by ending presumptive eligibility and retroactive coverage and imposing lockout periods for people who fail to report or renew on time.
They have also tried to increase cost-sharing by introducing premiums and copays for Medicaid recipients. GOP-led states have also added so-called "healthy behavior" requirements that impose cost-sharing on beneficiaries if they don't complete a health-risk assessment or wellness visit.
The Trump administration might pursue additional policies that don't require states to act, such as imposing a more aggressive identity verification process that would make it harder for people to enroll. That could tamp down enrollment nationwide.
If the D.C. Circuit bans work requirements altogether, conservatives will continue to pursue policies that limit enrollment or increase cost-sharing, many of which states have already included in their Medicaid waiver applications. But if the court reaches a narrower ruling, expect red states to reshape their work requirements to fit the new boundaries.