Evaluating the Administration’s Narrative on Medicaid Work Reporting Requirements

It turns out that last week was Never Mind Week.  Who would have guessed?

On Monday the Administration released its “Budget for a Better America,” proposing to cut federal Medicaid spending by nearly $1.5 trillion (with a “t”) over the next ten years.  These cuts included a mandate that state Medicaid programs require that “able-bodied, working-age individuals find employment, train for work, or volunteer (community service)” in order to receive coverage.  This proposal, the Administration estimated, would save the federal government $130 billion (with a “b”) over ten years.

On Tuesday, Secretary Azar testified on the Administration’s budget before the House Energy & Commerce Committee’s Health Subcommittee.  In his prepared remarks he stated: The Budget also provides additional flexibility to states for their Medicaid program, putting Medicaid on a path to fiscal stability by restructuring its financing, reducing waste, and focusing the program on the low-income populations Medicaid was originally intended to serve: the elderly, people with disabilities, children, and pregnant women.”  Never mind that the budget proposes to cut federal Medicaid spending by nearly $1.5 trillion (with a “t”) over the next ten years.  And never mind that low-income parents of dependent children receiving cash assistance were among the original Medicaid beneficiaries.  (Parents actually do matter).

On Thursday, a federal district court held back-to-back hearings in two lawsuits, both brought on behalf of Medicaid beneficiaries against the Secretary of Health and Human Services for violating the Administrative Procedure Act (APA) in approving work reporting requirement “demonstrations” in Arkansas and Kentucky.  The Judge, who nullified the Secretary’s first approval of the Kentucky “demonstration” last June, indicated he would issue rulings in both cases before the end of this month.

You’re probably wondering why the Administration would bother approving state work requirement “demonstrations”.  As reflected in its FY 2020 budget, the Administration already knows with a moral certainty that this policy is right—so much so that they want Congress to require all states to implement it, their asserted commitment to state flexibility notwithstanding.  (For CMS Administrator Seema Verma, state flexibility is a “pillar” of the Administration’s Medicaid policy.) But never mind.

The same day as the hearings, CMS posted on its website guidance for evaluating section 1115 demonstrations generally, and work reporting requirement demonstrations in particular.  These materials include a 27-page implementation template for work reporting requirement demonstrations and a 28-page template for monitoring and reporting on these demonstrations.  Never mind that Arkansas is already over 9 months into its “demonstration,” has disenrolled over 18,000 beneficiaries in the first 7 months (only 1,400 have reenrolled), and, as of the hearing, had no approved evaluation plan, much less an evaluator, in place.

A blog from CMS Administrator Seema Verma announced the posting of these materials.  Without any apparent sense of irony, the blog is entitled “Good Ideas Must Be Evaluated.”  In it, she explains that “Arkansas is implementing community engagement differently than New Hampshire, which has a different approach than Indiana.  But through effective evaluation of these demonstrations, we will gain a strong understanding of which policies are most effective, and identify opportunities to make improvements.  And having clear and consistent monitoring standards will provide early access to data to quickly understand the impacts that a given demonstration is having, allowing the state to make course corrections if necessary.”  Never mind that when early data relating to large, unexplained disenrollments in Arkansas prompted the Congressional advisory agency on Medicaid to write a letter to the Secretary urging him to hit the pause button before more beneficiaries were harmed, Administrator Verma told them, in effect, to drop dead.

On Friday, CMS announced approval of a work reporting requirement waiver for Ohio.  This makes Ohio the eighth state to have accepted CMS approval for such a “demonstration.”  According to the approval letter, which reads an awful lot like the Kentucky reapproval letter, the state does not expect to implement the “demonstration” until January 1, 2021.  Yet it was somehow urgent for CMS to issue the approval the day after the hearings in the Arkansas and Kentucky lawsuits. Is Administrator Verma trying to send the Judge a message that he needs to take his finger out of the dike and let these states go forward with their “demonstrations” so that they can test a policy that her Administration has, without data or evaluation, already asked Congress to impose on all states?

Never mind.

Andy Schneider is a Research Professor at the Georgetown University McCourt School of Public Policy.