Trump admin opens Medicaid to work requirement -- and lawsuits

By tomorrow, states may begin issuing the first-ever work requirements for Medicaid. And following that, courts will likely begin granting first-ever injunctions against them. The Trump administration sent out the word to states that the Center for Medicare and Medicaid Services (CMS) will grant waivers to states that wish to require that able-bodied recipients either work or seek work before getting health care benefits:

The Trump administration said Thursday that it would allow states to impose work requirements in Medicaid, a major policy shift in the health program for low-income people.

Federal officials said they would support state efforts to require able-bodied adults to engage in work or other “community engagement activities” as a condition of eligibility for Medicaid. …

Federal Medicaid officials said that work requirements should be compared to work requirements in other programs like food stamps, now known as the Supplemental Nutrition Assistance Program, and the welfare program known as Temporary Assistance for Needy Families.

In a speech to state Medicaid officials in November, Ms. Verma indicated that the Trump administration would be receptive to work requirements and other conservative policy ideas to reshape Medicaid. And she criticized the Obama administration, saying it had focused on increasing Medicaid enrollment rather than helping people move out of poverty and into jobs.

It might take states a while to implement these new standards. Opponents have already begun planning lawsuits and demands for temporary injunctions:

“This is going to go to court the minute the first approval comes out,” predicted Matt Salo, executive director of the National Association of State Medicaid Directors, whose members reflect a spectrum of views about requiring work.

Once CMS gives one state permission, “we would be looking very, very closely to the legal options,” said Leonardo Cuello, health policy director at the National Health Law Program. “It’s not a good idea, and it’s illegal.” …

The legal issue is that states must obtain federal permission to depart from Medicaid’s usual rules, using a process known as “1115 waivers” for the section of the law under which the program exists. To qualify for a waiver, a state must provide a convincing justification that its experiment would “further the objectives” of Medicaid.

Unlike the 1996 rewrite of welfare law, which explicitly mentions work as a goal, Medicaid’s law contains no such element, and critics contend rules that could deny people coverage contradict its objectives. To get around this, the 10-page letter argues that working promotes good health. The guidance cites research that it says demonstrates people who work tend to have higher incomes associated with longer life spans, while those who are unemployed are more prone to depression, “poorer general health,” and even death.

Cuello argues that this gets causality backward. Their argument will be that this finding is not sufficient to overcome Medicaid’s statutory requirement that waivers produce better outcomes because it’s proper health care that allows people to work better. Unless states have significant research to show Verma’s correct on causality, they may have a very difficult time in federal court attempting to get clearance on this new executive override of Medicaid statutes.

That is another example of the difficulty involved in reforming entitlements through regulation rather than Congressional action. The Trump administration has stuck to its guns on opposing entitlement reform, and Republicans don’t have anywhere near enough votes in the Senate to make a go of it anyway. Without that kind of effort, though, it’s impossible to do more than nibble around the edges. The work requirements added in 1996’s welfare reform came from Congress working together on a bipartisan statute with a president who badly needed some centrist wins. It never would have worked as a regulatory-level change, especially under Clinton, who wasn’t inclined toward it in the first place.

That’s not to say that work requirements are a bad idea for Medicaid. An argument can be made that the program was intended to give base-level access to medical care to help prevent widespread disease in the broader population, but it’s equally legitimate to say that it’s targeted at people whose inability to pay wasn’t willful, either.  The threshold would be simple enough to implement — those who qualify for Social Security Disability and Supplemental Security Income would get automatically exempted. Those who don’t qualify for SSD or SSI would have to deal with state-level work requirements.

This argument against work requirements doesn’t fly at all:

Americans should have the right to sit on their ass and do nothing, right up to the point where those Americans demand that others provide them what they refuse to provide for themselves. Most Americans, including those who support a broad and dynamic safety net, rightly feel offended at being taken as fools in this manner. They work hard to provide for themselves and their families, and would resent having to part with funds normally used for that purpose to provide for someone else who just “sits on their ass.” There is no right to handouts. Or at least there shouldn’t be.