States Now Allowed to Impose Work Requirements on Medicaid Recipients

The Centers for Medicare & Medicaid Services (CMS) have announced a new policy designed to incentivize work for Medicaid recipients. The policy will allow states to require Medicaid recipients to work or participate in "community engagement." States can define participating in community engagement to include job training, job search, education, volunteer activities, or caregiving. Some states have already sent proposals to require work activity of Medicaid recipients: Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, North Carolina, Utah and Wisconsin. Three other states are actively considering doing so.

Exemptions from the work requirement. CMS will require states to exempt from the work requirements the elderly, pregnant women, children, and people with a disability (or those who have an acute medical condition or are otherwise "medically frail"). States can also decide to exempt other groups from the requirements, such as full-time students or caregivers for dependent children. States must make sure that individuals with opioid addiction or other substance use disorders have access to Medicaid and must make reasonable modifications for these individuals, such as allowing medical treatment or substance abuse treatment to count as work activity.

How many will be affected? The work/community engagement requirements may not change much for a large percentage of Medicaid recipients, as 60% of non-elderly adult Medicaid recipients are already working full or part time. And many of the non-working recipients will likely fall under an exemption. According to a study by Kaiser Family Foundation, 14% of Medicaid recipients report they don't work because of illness or disability, 12% because they are taking care of family (7% taking care of children under 6), and 6% because they are going to school. That leaves about 8% of recipients who don't work because they can't find work or don't look for work.

Protections for people with disabilities. Note that the states cannot apply the new work requirements to anyone receiving SSI disability. In addition, states must comply with the Americans with Disabilities Act, which requires reasonable accommodations, such as reduced work hours, for those with disabilities (this federal law applies to many people who are not receiving SSI or Social Security disability benefits).

Effective date: January 11, 2018