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Team Trump has big plans to shrink Medicaid with work requirements

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The Trump administration still has big plans for putting restrictions on Medicaid.

Congress failed to repeal Obmacare and its Medicaid expansion or institute federal spending caps for the whole program. But the Centers for Medicare and Medicaid Services will still have broad authority to reshape the low-income insurance program, which covers 70 million Americans, in Trump's image.

CMS Administrator Seema Verma laid out her vision in a speech today to the National Association of Medicaid Directors. One line stuck out above the rest.

“CMS believes that meaningful work is essential to beneficiaries’ economic self-sufficiency, self-esteem, well-being, and health of Americans," Verma said.

The message was clear, I think: State-proposed work requirements for Medicaid would be approved by this administration.

Verma accused the Obama administration and the Democratic Congress that expanded Medicaid to childless adults in Obamacare (a provision that has covered 12 million of the poorest Americans) of perverting the purpose of the program, which she said is to protect the most vulnerable people.

Putting able-bodied adults on Medicaid, she said, "doesn't make sense."

Others take serious issue with that reading. Medicaid expansion was, after all, a policy explicitly approved by Congress.

Sara Rosenbaum, a health policy professor at George Washington University, told me a few months ago that the Trump administration was signaling it was preparing "to deny or nullify an entire act of Congress by claiming that it’s contrary to the act of Congress."

"It's really mind-blowing," she said then.

But this is a philosophical debate. Verma holds the strings right now, and states are preparing to take advantage of this new freedom that the Trump administration wants to provide.

Six states have waivers pending with CMS to institute work requirements, according to the Kaiser Family Foundation:

  • Arkansas
  • Indiana
  • Kentucky
  • Maine
  • Utah
  • Wisconsin

They differ slightly in their details, but the thrust is the same: People in poverty would be expected to work or look for work or they risk losing their Medicaid coverage. Exceptions would be made for people with long-term disabilities, the elderly, and children.

There is a real question about whether work requirements make any programmatic sense.

"Most people on Medicaid who can work already are," Drew Altman, president of KFF, wrote recently for Axios.

Kaiser Family Foundation

But the states do project some drop in coverage as a result of the requirements. Kentucky, for example, estimates that Medicaid enrollment would drop by nearly 20,000 people (assuming a full year of coverage) in the first year of its waiver. That drop is attributed to the work requirement and the requirement that Medicaid enrollees pay premiums.

These states have other plans that the Trump administration is more likely to be receptive to and could reduce Medicaid enrollment.

Wisconsin, for example, wants to drug-test Medicaid recipients — even though the program is currently the No. 1 provider of addiction recovery services in the midst of a devastating opioid epidemic.

Several states (Maine, Utah, and Wisconsin) also want to create a time limit on Medicaid coverage. Wisconsin projects that its time limit would reduce enrollment by more than 4,000 people, according to KFF.

All three of these provisions — work requirements, time limits and drug testing — would send Medicaid in a new direction.

Obamacare sought to create a universal Medicaid program that would cover almost every American in poverty. The law has insured millions of poor people through the program, and there have been demonstrable improvements in the financial security of poor people who live in states that expanded Medicaid.

But Republicans and the Trump administration have a very different vision, which Verma articulated Tuesday. They believe the goal should be to get people off Medicaid, and the policies that states are proposing and CMS is now willing to approve would shrink the program.

"While many responded to this expansion with celebration, we shouldn’t just celebrate an increase in the rolls, or more Medicaid cards handed out," Verma said today. "For this population, for able-bodied adults, we should celebrate helping people move up, move on, and move out."

Chart of the Day

Kaiser Family Foundation

The full spectrum of proposed Medicaid changes. We covered the big ones above. But states have a lot of ideas about how to overhaul their Medicaid programs. This chart gives you a snapshot of what states want to do. If you want to learn more, you should read this KFF report in full.

Kliff’s Notes

With research help from Caitlin Davis

Today's top news

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