Florida Eyes Work Requirements for Medicaid

CMS sent a letter to the nation's governors last March stating it was willing to look at work requirements in upcoming waivers.

Work requirements for Medicaid, long a point of contention between states and CMS, may be implemented in Florida, one of the largest states left that did not expand the healthcare program for the poor under the Affordable Care Act (ACA).

The Miami Herald reports that Florida’s House of Representatives is moving ahead with a plan that would require “able-bodied” Medicaid recipients to show they are working, taking part in job training, or looking for work. State lawmakers are also weighing a small cost-sharing amount of $10 to $15 a month, tied to income. One provision would block people from Medicaid rolls for 12 months if they failed to meet work rules or pay premiums.

Florida’s move comes less than a month after CMS signaled it would be open to work requirements under its Section 1115 authority, which some states have used to customize Medicaid expansion plans since the ACA took effect. CMS’ March 14, 2017, letter to governors gave the green light to provisions requiring “training, employment, and independence.”

Kentucky Governor Matt Bevin already has a pending waiver application that would install work requirements and cost-sharing obligations among those in the Medicaid expansion population—those added to the rolls after the ACA permitted states to cover households earning up to 138% of the federal poverty level. Florida’s lawmakers, by contrast, want to apply the requirements to existing Medicaid population, which in that state is limited to adults with dependent children, pregnant women, low-income seniors, and those with disabilities.

In 2015, Florida and the Obama administration engaged in a showdown over whether the state would continue to block Medicaid expansion while asking the federal government to renew a separate waiver that brought funding to its safety net hospitals. At that time, business groups said the state was missing out on $5.9 billion in federal funding and leaving 750,000 people without coverage who would otherwise be eligible.

If Florida’s steps become final, it would signal a sea change in connecting Medicaid to employment. New CMS Administrator Seema Verma has recused herself from handling Kentucky’s application since her former consulting firm helped develop the plan, but so far there’s been no word on whether she would weigh in on a Florida plan.

Work requirements have long been a point of debate between advocates for the poor, who say they have no place in determining healthcare eligibility, and lawmakers and governors from more conservative states who say those getting benefits need some “skin in the game.” Early on in the life of the ACA, then-Pennsylvania Governor Tom Corbett tried and failed to get a work requirement included in a Medicaid expansion waiver. CMS later rejected proposals from Indiana and Arizona; although Arizona is submitting a new request.

When work requirements came up at a meeting between then-HHS Secretary Sylvia Mathews Burwell and the nation’s governors, she said that CMS’ position has been that “healthcare is not a conditional thing.”

Policy experts question whether work requirements achieve their goals. They note that in recent years, Medicaid eligibility was no longer tied directly to meeting criteria for welfare. A recent brief from the Kaiser Family Foundation says some argue that being healthy is necessary to find a job in the first place. As a practical matter, the brief notes that 8 in 10 households that receive Medicaid have at least 1 adult working, and 59% are working themselves even if not required.

Excluding those on Supplemental Security Income, the report finds that those not working cite the following reasons: 35% report an illness or disability, 28% are taking care of the home or a family member, 18% are in school, 8% are looking for work, and 8% are retired. A report on Ohio’s Medicaid expansion program found that most in this group who were not working were looking for a job, and having health coverage made the task easier.

However, the desire of some states to show that benefits are not going freely to able-bodied adults has kept the work rule discussion open. At the meeting with the National Governors’ Association, Burwell said that CMS’ historic position did not put a discussion of work requirements off limits. A key question will be whether CMS ends a requirement that states show they will not cover fewer people. However, many states that might pursue work requirements have not yet expanded Medicaid, so any change that captured existing and new enrollees would require this standard to be revisited.