Medicaid Work Requirements Could Create Additional Problems in Rural

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CORRECTION: This article has been changed to correct the percentage of Medicaid participants who worked or were motivated to work, according to the study. The correct figure is one in four.

The efforts of eight states to enact work requirements for Medicaid recipients could create special problems for rural participants, according to a new study.

Researchers Andrew Schaefer and Jessica Carson at the Carsey School of Public Policy at the University of New Hampshire found that one in four of potentially impacted Medicaid participants already worked at least part of the previous year or were motivated to work but could not find a job.

“As state policymakers consider Medicaid-related work requirements, it is worthwhile to consider the administrative costs of implementing this kind of [work requirement] waiver alongside the benefits of cost savings associated with reducing Medicaid rolls, and the expenses related to increasing the uninsured low income population,” the researchers said. “In both rural and urban places, legislators should consider whether the consequences to families losing health insurance coverage outweigh the relative benefits of enforcing work requirements.”

Rural residents participate in Medicaid at a higher rate than metropolitan residents. And rural areas generally have greater unemployment rates or discouraged workers.

MaryBeth Musumeci, of the Kaiser Family Foundation, has also studied state-level proposals to impose work requirements on Medicaid recipients. “The data shows that most Medicaid recipients who can work are already working. There are some additional risks with the work requirements proposals that could complicate the implementation and administration of the program. We’re concerned that many eligible people, especially low and moderate income working people, would fall through the cracks.”

A message from the Rural Assembly

Musumeci points to a study conducted by her collegues documenting the role of Medicaid for rural America. “Rural Americams tend to have less access to health care services, be older, and have lower incomes. Given these trends, you would expect rural families to face greater impacts from work requirement proposals,” Musumeci said.

One critical component of the Affordable Care Act of 2010 (ACA) was the option of states to expand Medicaid coverage to adults with incomes up to 138% of poverty levels. This allowed states to opt-in to the federal health insurance program to cover many more citizens, including those engaged in low-wage and part-time employment.

Both the House and Senate ACA Reform bills include the option for states to institute work requirements for Medicaid, according to Musumeci.

Under the current law, eight states have petitioned the federal government, who administers Medicaid, to implement mandatory work or job training requirements for participants.

Recent proposals have been catalogued by the Kaiser Family Foundation:

Table 2:  Work Proposals in State Medicaid Expansion § 1115 Waiver Requests as of March 2017
StateYearCondition of EligibilityPopulationProposalStatus
Arizona2015YesAble-bodied expansion and traditional adultsWork, actively seek work, or attend school or job training for 20 hours/week; also proposed voluntary work incentive program for non-medically frail expansion adultsDenied by CMS
2017YesIncludes able-bodied expansion and traditional adults

Excludes full-time high school students, sole caregiver for family member under age 6, receiving temporary or permanent long-term disability benefits, determined physically or mentally unfit for work by health care professional

Work, actively seek work, or attend school or job training for 20 hours/week; requires monthly verification and one year lock-out for making false statementState public comment period completed, to be submitted to CMS
Arkansas2017YesIncludes expansion adultsWork requirementPlanning to submit waiver request
Indiana2015YesIncludes expansion adultsWork referralNot included as part of waiver approval by CMS – state established separate voluntary state-funded work search and job training program
Kentucky2016Yes – benefits suspended for failure to comply and not reinstated until compliance for full monthIncludes all able-bodied working age adults

Excludes children, pregnant women, medically frail, students, and primary caregivers of dependents

Volunteer work, employment, job search, job training, education, or caring for non-dependent relative or person with disabling chronic condition for 5 hours/week in year 1 and 20 hours/week in year 2Waiver application pending with CMS
New Hampshire2015NoIncluded expansion adultsReferral to state job counseling service if unemployedNot included as part of waiver approval by CMS
Ohio2016NoIncluded expansion and traditional adults 18 and olderReferral to work development agency if not working 20 hours/weekWaiver application denied in its entirety by CMS
Pennsylvania2014Yes – beginning in year 2, would lose eligibility for 3 months, then 6 months, then 9 months for noncomplianceIncluded expansion and traditional adults, ages 21 to 64

Exemption for those experiencing crisis, serious medical condition or temporary condition that prevents work search such as domestic violence or substance use treatment

Excluded: seniors, children under 21, pregnant women, SSI beneficiaries, those in institutions, dual eligible; full and part-time students must register but do not have to complete work activities

20 hours/week of work or complete 12 job training and employment-related activities/month; Those working more than 20 hours/week could have premiums or cost-sharing reduced or other incentives beginning in year 2Not included as part of waiver approval by CMS; Governor Corbett planned to offer incentives for Medicaid beneficiaries who chose to participated in state-funded job training and work activity program; Governor Wolf did not pursue this program
Utah2014No, although state was considering sanctions related to benefits under other state programs for noncomplianceIncluded able-bodied expansion adultsAutomatic enrollment in work program with access to online assessment, job training, and job postings, upon Medicaid applicationWas not seeking waiver authority for work proposal and overall waiver was never submitted to CMS
NOTE: Montana did not seek § 1115 authority for a work program as part of its Medicaid expansion waiver, but state law creates a state-funded voluntary program. SOURCE: KFF analysis of state waiver proposals.

A message from the Rural Assembly

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