Medicaid Work Requirements and COVID-19: The Wheels Come Off

The wheels have come off of the CMS Administrator’s work requirements bus tour. Ill-conceived from the start, the Administrator’s effort to “reframe” Medicaid  has been brought to an abrupt halt by the COVID-19 pandemic, the resulting economic collapse, and the Congressional response, which prohibits states from disenrolling resident Medicaid beneficiaries for any reason, including work requirements. Even true believer states like Utah are throwing in the towel and suspending their onerous work reporting requirements, at least for now.

Of course, Medicaid work requirements were never a good idea, even in good economic times. As my colleague Joan Alker has pointed out, the red tape of work requirements is demonstrably effective in terminating beneficiaries from coverage; before being stopped by a federal court, Arkansas disenrolled 18,000 with a barely detectable increase in newly reported work.  This might be one reason that there is no provision for work requirements in the Medicaid statute, or that the Families First Coronavirus Response Act prohibits the imposition of more restrictive eligibility requirements during the COVID-19 emergency period.  It is definitely the reason that the D.C. Court of Appeals affirmed the ruling of a federal district court invalidating the Arkansas work requirements “demonstration”. The Court of Appeals ruled that the Secretary acted illegally in approving work requirements under section 1115 of the Social Security Act because the primary objective of Medicaid is the provision of coverage, not its termination.

COVID-19 has brought the flaws in Medicaid work requirements into high relief.  They are a 16th century construct facing a 21st century pandemic.  It’s no contest.  If Medicaid is run as a program for the “deserving” rather than a health insurance program, COVID-19 wins.  (The Elizabethan Poor Laws were not much of a match for London’s Great Plague either).  As my colleague Adam Searing has explained, health care coverage is an essential part of a public health response to the pandemic; if people don’t have coverage, many will not seek the testing and treatment they need because of the cost, and our collective ability to contain the spread of the virus will be compromised.  Front-line providers will struggle to continue operating while serving large numbers of uninsured COVID-19 patients who are unable to pay for services.  More broadly, as our colleague John Monahan at the O’Neill Institute has noted, eligibility restrictions designed to exclude those not considered  “deserving” undercuts the ability of social welfare programs like Medicaid to help the nation mount a 21st century public health response.

No one expects the CMS Administrator to abandon her deeply-held antipathy to Medicaid coverage for the “able bodied.”  But there’s no evidence that COVID-19 distinguishes between the “able bodied” and others as it spreads in a community; instead, it seems to be an equal-opportunity contagion.  All low-income Americans—even the “able-bodied”—need coverage for testing and treatment; Medicaid is the nation’s designated health insurer for those Americans.  As my colleague Tricia Brooks has pointed out, CMS has recently taken some positive steps to help state Medicaid programs respond.  The Administrator should continue to do all she can to help Medicaid achieve the full potential of coverage during this public health emergency.  Then, after the emergency ends, and the economy returns to health, she can resume her ill-advised crusade.

There is precedent for setting aside policy differences during the public health emergency.  Just this past week, federal District Court Judge James Boasberg granted a motion by the state of Michigan to stay the proceedings in a case challenging the premium and healthy behaviors requirements in the state’s section 1115 demonstration. (The Judge had vacated the state’s work requirements in March).   The stay is in effect until the end of the COVID-19 public health emergency, or if the state wants to implement before then, 45 days before the state implements.  In other words, stand down until the emergency ends, then resume the argument.  The same principle should apply not just to section 1115 work requirements waivers, but also to the Administrator’s disruptive proposals for block grants and her proposal to limit state revenue sources.   All it would take is a little humility.

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