South Carolina will become the first state to apply Medicaid work requirements to parents of minor children with incomes under 100% of the federal poverty level, after the CMS approved the state's waiver request Thursday.
Adult Medicaid enrollees, including parents of minor children, will have to document 80 hours of monthly work, job training, education or community service to receive Medicaid benefits starting next July, unless they can show they qualify for an exemption.
South Carolina is the first state that has not expanded Medicaid to low-income adults under the Affordable Care Act to establish a work requirement, a signature initiative of the Trump administration.
Wisconsin, another non-expansion state, also has received CMS approval to impose work requirements. But unlike South Carolina, Wisconsin has expanded Medicaid to all adults up to the federal poverty level, and it is only applying the work requirement to childless adults.Five other non-expansion states have work requirement waivers pending before the CMS.
At the same time, the CMS approved South Carolina's separate Section 1115 waiver request to expand coverage for parents of minor children from 67% of poverty to 100% of poverty.
Single parents who are caregivers for children will have to apply for an exemption from the so-called community engagement requirement. One adult in two-parent families, however, will have to meet the community engagement requirement.
The agency also approved the state's request to provide Medicaid coverage for one year to adults with incomes under 100% of poverty who are chronically homeless or who need substance use treatment, subject to state budget caps.
The CMS did not approve South Carolina's requests to expand coverage under the Children's Health Insurance Program for children, pregnant women, and women in their first year after delivery. The state had asked to cover these women and children in households with income up to 241% of poverty.
"Competition for workers is fierce and businesses are struggling to fill vacancies," South Carolina's Republican Gov. Henry McMaster said at a news conference Thursday, accompanied by CMS Administrator Seema Verma. "In this economy, there is no excuse for the able bodied not to be working."
In its approval letter, the CMS said it authorized the five-year demonstration to evaluate whether encouraging employment improves health and wellness, helps people become financially independent, and reduces healthcare costs. It did not estimate how many people would lose coverage due to the work requirement.
"South Carolina's requirements — complete with appropriate protections — will lift South Carolinians out of poverty by encouraging as many as possible to participate in the booming Trump economy," Verma said.
The state estimated that 83,000 adults either will have to prove they qualify for an exemption or meet the community engagement mandate. They will have to report to the state quarterly. Beneficiaries who are found out of compliance for three consecutive months will have their coverage suspended for three months or until the requirements are met, whichever comes first.
A number of medical and advocacy groups, including the American Academy of Pediatrics and the Children's Defense Fund, immediately denounced the CMS' approval of the South Carolina work requirement waiver.
The waiver "does nothing to help parents living in or near poverty to overcome the barriers they face in obtaining jobs, such as providing affordable, quality childcare and job training, but instead adds red tape burdens that will fall squarely on parents' shoulders," the American Academy of Pediatrics and other groups said in a written statement.
Earlier this year, a federal judge threw out CMS' approval of Medicaid work requirements in Arkansas, Kentucky and New Hampshire; a federal appeals court currently is considering the issue. That followed controversy over the work requirement implementation in Arkansas, where about 18,000 people lost coverage within a few months after the requirement was established last year.
Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, which opposes the work requirement, said her group will examine all administrative and legal remedies including filing a lawsuit to overturn the waiver approval. She warned the work requirement likely will increase the already-growing number of uninsured children, because uninsured parents more often don't seek care or coverage for their kids.
"If we didn't learn from what happened in Arkansas, putting up barriers for the sake of putting up barriers, we're not thinking about healthcare," she said.
South Carolina's waiver approval may be even more vulnerable to a legal challenge than those in other states, said Joan Alker, executive director of the Center for Children and Families at Georgetown University. That's because low-income parents are a mandatory rather than an optional coverage group.
"Since part of the Trump administration's defense in the Arkansas and Kentucky cases has been that the (Affordable Care Act) expansion group is an optional population, this makes it even harder for them to defend their position."