President Donald Trump’s administration told states Friday they will not have to remove Medicaid beneficiaries for failing to satisfy new work requirements until July.
The requirements are set to take effect nationwide Jan. 1, prompting states to race to establish the staffing, training and technology needed for implementation.
Medicaid is the joint federal-state health insurance program for people with low incomes. The Centers for Medicare and Medicaid Services told state Medicaid directors Friday that they must still determine whether many applicants and beneficiaries meet the new standards, including working, attending school or volunteering. However, states may delay removing anyone from the program or denying coverage for failing to meet the rules until July 1.
The additional time will allow state social service agencies to test and refine complex systems before noncompliance carries consequences. CMS said states have made progress but continue to face implementation challenges.
“I think these extra six months are going to give states the ability to respond to the change, and there will be fewer people that lose their coverage due to administrative failures” caused by states’ inability to prepare, Kathy Hempstead, a senior policy officer at the Robert Wood Johnson Foundation, told The Associated Press.
Even so, Hempstead said it remains uncertain which states will take advantage of the extension.
Kate McEvoy, executive director of the National Association of Medicaid Directors, said state Medicaid officials “appreciate the additional flexibility that CMS is providing.”
Work requirement faces political pressure
The delay could also give Congress more time to consider changes to the policy. Democrats, who are set to take control of both chambers in January after sweeping election victories last week, have said they want to repeal the requirements.
The announcement followed a request from Democratic Sen. Ron Wyden of Oregon and Rep. Frank Pallone Jr. of New Jersey, who wrote CMS Administrator Dr. Mehmet Oz this week seeking a postponement of the work-reporting rules. Their letter cited, among other issues, a recent ruling by a federal court in Boston that said medically frail people should not be subject to the eligibility requirements tied to the mandate.
“The practical reality is that this significant implementation issue may not be definitively resolved for months, creating untenable uncertainty for states that need a final resolution of this issue before going live with work reporting requirements,” the letter said. “The court ruling is an important victory for the millions of medically frail people who rely on Medicaid for their health care coverage.”
Under the policy, many Medicaid beneficiaries must work or volunteer at least 80 hours a month, or attend school at least half-time. The rules apply only to people receiving Medicaid through a voluntary expansion adopted by 40 states. That expansion was designed to extend coverage to more low-income adults without children living at home. Exemptions apply to people over 64, those caring for children younger than 14 and individuals considered too medically frail to work.
Opponents argue that most people affected by the mandate already work. They warn that many could lose coverage not because they failed to meet the work standard, but because they could not complete the paperwork required to prove compliance.
The federal government is urging states to use information from other government agencies and reliable outside sources to verify employment or other qualifying activities, reducing the amount of documentation beneficiaries must submit themselves.
Paperwork remains a central concern
Several states have begun testing work requirements ahead of the national launch.
Nebraska was the first, starting its program in May.
Preliminary data presented to the state’s Medicaid Advisory Committee showed that more than nine out of 10 people subject to the requirement whose benefits were scheduled for renewal in July and August qualified for continued coverage.
Still, 533 people were denied continued coverage. In most cases, the issue involved paperwork: They had not demonstrated that they were working or qualified for an exemption. Of those denied, 43 lost coverage specifically because they did not meet the new requirement.
The same pattern emerged among Medicaid applicants denied coverage because of work requirements between May and August. Most did not receive benefits because they failed to submit information showing whether they complied with the rules.
For both groups, it is unclear how many people failed to provide documentation because they were not working and how many met the requirements but were unable to prove it.
“There are likely people who are still eligible for coverage who lost it,” said Amy Behnke, CEO of the Health Care Center Association of Nebraska.
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