CMS nixes Medicaid work requirements in Arizona, Indiana

The Centers for Medicare & Medicaid Services has scrapped work requirements for Medicaid coverage in Arizona and Indiana, rolling back approvals gained during the Trump administration.

In March, the Biden administration began the process of withdrawing approval for Medicaid work experiments, which required certain beneficiaries to participate in community engagement activities, such as employment, education or job skills training, to continue receiving coverage.

Since then, CMS has notified Arkansas, Michigan, New Hampshire and Wisconsin that it is withdrawing work requirement waiver authorities in these states, according to the Kaiser Family Foundation’s Medicaid Waiver Tracker.

Now, Arizona and Indiana have been added to the list, with CMS Administrator Chiquita Brooks-LaSure writing in letters to the two states that “to require community engagement as a condition of continued eligibility [is] not likely to promote the objectives of the Medicaid statute.”

Arizona’s requirement was approved in January 2019 and Indiana started implementing its version in the same month, but neither state currently has it in place — largely due to the litigation against the requirement and the advent of the Covid-19 pandemic.

CMS cited the pandemic as a major reason for nixing the Medicaid work requirements in a Feb. 12 letter sent to all the states with approved waivers.

“The Covid-19 pandemic has had a significant impact on the health of Medicaid beneficiaries,” Brooks-LaSure wrote in those letters. “Uncertainty regarding the current crisis and the pandemic’s aftermath, and the potential impact on economic opportunities…and access to transportation and affordable child care, have greatly increased the risk that implementation of the community engagement requirement approved…will result in substantial coverage loss.”

Though Arizona did not respond to the February letter, Indiana submitted additional information. But the information did not address CMS’ concerns, the latest letter states. In fact, the state concurred that implementation of the work requirement is not feasible until it has recovered fully from the pandemic, but it did not say how it would determine when that has been achieved.

Further, there is evidence that Medicaid work requirements can cause widespread coverage loss. In Arkansas, more than 18,000 beneficiaries lost coverage in 2018 after the requirement was enacted, a fact CMS cited in its February letters to states.

But proponents of the requirements claim that the requirements incentivize people to find work.

With the Biden administration in the White House, it appears unlikely that the work requirements will be allowed to stand. The administration withdrew the White House’s support of a case challenging the legality of the Arkansas and New Hampshire work requirements, which reached the Supreme Court. In March, the court canceled oral arguments in the case following a request from the Department of Justice.

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