On Friday, the Centers for Medicare and Medicaid Services (CMS) put states with Medicaid work requirements on notice for a likely partial withdrawal of their section 1115 demonstration project waivers. At least nine states received the letter, including Arizona, Arkansas, Georgia, Indiana, Nebraska, Ohio, South Carolina, Utah, and Wisconsin.
Citing “serious concerns about testing policies that create a risk of a substantial loss of health care coverage in the near term,” primarily because of COVID-19’s impact on “the health of Medicaid beneficiaries” and the potential impact on “economic opportunities and access to transportation and affordable child care,” acting CMS Administrator Elizabeth Richter indicated that the agency is beginning the process “of determining whether to withdraw the authorities … that permit the state to require work and other community engagement activities as a condition of Medicaid eligibility.”
States have 30 days to provide any additional information to CMS to be considered in their determination. As well, if CMS does decide to withdraw the waivers, states will have an opportunity to request a hearing to challenge the determination.
According to Mallory Hackett, associate editor of Healthcare Finance, this move by CMS falls in line with President Biden’s January executive order to “strengthen and protect healthcare access.” Opponents believe work requirements “lead to lost coverage without improving employment.” In Arkansas, for instance, the first state to implement work requirements, 18,000 adults lost coverage in the first ten months of the program, at which time a federal judge put the policy on hold.
Eight states had work requirement waivers approved as of January 26, 2021, according to the Kaiser Family Foundation. Six of those have not yet been implemented: Arizona, Georgia, Nebraska, Ohio, South Carolina, and Wisconsin. Of the two that have been implemented, Indiana voluntarily halted their program in October 2019 because of pending litigation, and Utah paused theirs in March 2020 because of COVID-19.
CMS cited the fact that none of these programs currently is in effect nor can they be activated until after the COVID-19 public health emergency because of provisions in the Families First Coronavirus Response Act (FFCRA) as part of their rationale for reviewing the waivers at this time.
Four other states have programs that have been set aside by the court: Arkansas, Kentucky, Michigan, and New Hampshire. And seven other states have waivers that are pending with CMS: Alabama, Idaho, Mississippi, Montana, Oklahoma, South Dakota, and Tennessee.
The CMS letters to the states indicated that other parts of their section 1115 demonstration projects also would be reviewed. Indiana received a 10-year extension of its traditional Medicaid expansion program—the Healthy Indiana Plan (HIP)—back in October 2020. That program also is approved through a Section 1115 Waiver.
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