State action to implement work requirements into their Medicaid programs is heating up, as some states roll out their programs while others are fighting in court to keep them alive.

New Hampshire announced Monday it would delay suspending any Medicaid coverage until September because of consumers’ noncompliance with the work requirements. Meanwhile, Indiana on July 1 began the first steps of implementing its work requirements. Court action in three other states is expected in the coming months.

The path to implementing requirements for work or other forms of community service through Medicaid, the health program that covers some of the nation’s poorest individuals, has been tricky and controversial.

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MaryBeth Musumeci, associate director at the program on Medicaid and the uninsured at the nonpartisan Kaiser Family Foundation, said the overarching issue is whether requiring work is a permissible objective of Medicaid coverage.

Conservatives argue that requiring Medicaid recipients to report their work hours is a fiscally responsible way to promote self-sufficiency, while liberals counter that this process won’t actually increase employment or bring people out of poverty but will reduce coverage.

A June study published in the New England Journal of Medicine found that work requirements are not increasing employment and private insurance coverage.

“Many more states are considering work requirements, and the Trump administration has been eager to support that effort,” said the study’s lead author, Benjamin Sommers, professor of health policy and economics at the Harvard T.H. Chan School of Public Health. “With these sorts of broad social policy changes, it’s really important to have evidence afterwards to see whether they’re working as intended. Based on our results so far in Arkansas, it doesn’t appear that this particular policy is accomplishing its goals.”

The Centers for Medicare and Medicaid Services has approved nine waivers requiring work but currently only Indiana is actively requiring reporting. Litigation prevented Kentucky from imposing such requirements, and another lawsuit caused Arkansas to stop its program earlier this year. New Hampshire is awaiting oral arguments in a challenge to its program as well.

Still, CMS remains committed to the requirements, and has continued to approve waivers, including Ohio’s in March, as other states’ programs are being litigated.

“The governors that are pursuing these waivers are really interested in getting their citizens a pathway out of poverty. I don’t think it’s enough — and many of these people share the same views — to give these people a Medicaid card and say good luck,” said CMS Administrator Seema Verma in an interview with CQ Roll Call earlier this year. “That’s why we’ve been trying to include a lot of variety so we can see what works best.”

State by state

Each state that started to implement some sort of Medicaid work requirement took a slightly different approach.

Arkansas was the first state to incorporate 80 hour per month work requirements in 2018 for some enrollees, but these are no longer in effect due to a circuit court ruling this year.  

New Hampshire became the second state to start phasing in slightly stricter requirements but recently changed them. Starting in June, individuals were supposed to work 100 hours per month, and enrollees would have had until July 7 to report their June hours or risk suspension later this year. Pregnant women and people who are medically frail or have a disability were exempted.

But in late June, New Hampshire’s Democratic-controlled legislature passed a compromise scaling back the work requirements and expanding the exemptions. The legislation allowed the New Hampshire Department of Health and Human Services Commissioner to delay implementation.

Republican Gov. Chris Sununu signed it into law Monday. DHHS Commissioner Jeff Meyers also announced he would postpone the implementation deadline for its work requirements by 120 days and waive coverage suspensions for nearly 17,000 individuals.

Meyers has said the state will also increase outreach, as only a third of affected enrollees had completed the reporting requirement.

Indiana rolled out its 20 hour per month requirements on July 1, with stricter requirements being phased in over time. Unlike in Arkansas, compliance is evaluated yearly rather than monthly.

Last year, Arkansas terminated consumers’ coverage after three months of noncompliance, resulting in almost 17,000 individuals being dropped from the program.

“Part of the issue with Arkansas’ is that [consumers] just weren’t aware of it, either with the frequency or just that they had to report at all,” said John Graves, an associate professor of health policy at the Vanderbilt University School of Medicine.

Consumer advocates who successfully sued the state said ending coverage was ill-advised.

“The fundamental truth is that work requirements, no matter how you structure them, are legally suspect and cannot be fixed. Low-income families already have plenty of incentive to make a living without adding an illegitimate and ill-conceived Medicaid work requirement,” wrote David Machledt, senior policy analyst in the National Health Law Program, one of the plaintiffs in the Arkansas litigation.

Nina Schaefer, senior research fellow at The Heritage Foundation and a former senior counselor to the secretary at HHS during the Trump administration, said the administration has been stressing promoting outcomes with its work requirements. She said federal officials hope to show “that people are better off in the end because of these.”

Wisconsin and Michigan are the next states slated to roll out work requirements in late October and January, respectively. Both states also have new Democratic governors.

Maine, which also has a new Democratic governor this year, will not implement its work requirements, but it may not be as simple for Wisconsin and Michigan to reverse course.

“Maine was able to use executive power to decline to implement its waiver and because of the way that the legislature has limited the governor’s authority in Wisconsin especially, I just don’t think that the governors in Wisconsin or Michigan have the same ability to pull back quite as dramatically as Maine did,” said Allison Orris, counsel with Manatt Health and a former federal health care policy official.

Michigan Gov. Gretchen Whitmer wrote to Verma in February, saying that she plans to work with state lawmakers to tweak the plan to protect coverage while promoting work. The state Senate passed a bill in late June.

Upcoming action

Each Medicaid program so far has been challenged in court independently, so the litigation in the three states facing lawsuits should not affect the implementation of other programs.

The next legal action expected is for New Hampshire’s program, which will be heard in the U.S. District Court for the District of Columbia.

U.S. District Judge James Boasberg, an Obama appointee who previously ruled that both Arkansas and Kentucky’s programs were invalid, is scheduled for the case.

Advocates expect action in mid-July, and the plaintiffs said they want a ruling by August 1, but that could shift after the policy changes the state announced Monday.

Musumeci said the briefing was set up so it could be decided by the end of July before coverage losses initially were to take effect in August.

Both the Kentucky and Arkansas cases are set to be heard by the U.S. Court of Appeals for the District of Columbia Circuit. The states’ briefings end Aug. 1, and oral arguments are expected by October.

“CMS has been pretty clear that it doesn’t plan to reconsider anything in either state until the decision is reviewed on appeal,” said Orris. “It’s basically hands-off right now until the court says something new. Depending on what the court says, it might be that Kentucky or Arkansas both have to reapply or the court says there’s a defect in the waiver or the court just says no, it’s still not implementable. The position is nobody is trying to fix anything right now because the case is on appeal.”

Graves says that if the court reverses the Arkansas decision, it could cause additional confusion for enrollees and providers. Hospitals and doctors want to know if a patient is enrolled in Medicaid and they will be paid.

“If you don’t know at any given time whether an individual that used to be insured is currently insured, there’s an administrative cost in following up,” he said.

In the next few months, additional litigation or approvals may come. CMS’ most recent Medicaid work requirements waiver approval was in March.

“There are a number of states that have applications pending at CMS. I do think at least some states are going to be cautious and looking to see what the court ultimately holds and the potential threat of litigation may give some states some pause,” said Musumeci, who also said she would not be surprised if advocates challenge Indiana’s program as well.