Nearly six months ago, the Biden Administration initiated efforts to withdraw work reporting requirements in the eleven states with approved section 1115 Medicaid waivers. Now, the resolution many have been waiting for is almost entirely complete.

On August 10, Ohio, South Carolina, and Utah all received letters from CMS formally withdrawing their work requirement waivers. The recissions of the work requirement in South Carolina’s “Palmetto Pathways to Independence” and Utah’s “Primary Care Network” demonstration withdrew the specific waiver authorizing the states to impose the requirements. In the case of Ohio and South Carolina’s second 1115 demonstration “Healthy Connections Works” though, CMS withdrew the states’ demonstrations in their entirety since the demonstrations only included the authority to impose work requirements.

The withdrawal letters to these three states relied on much of the same logic and research cited in previous recission letters. But in South Carolina’s letter, CMS emphasized child care shortages in the state induced by the COVID-19 pandemic to a greater degree than in other states’ letters and noted that the child care barriers resulting from work requirements would be devastating to the low-income parents who were the primary group subject to the requirements in its “Healthy Connections” demonstration. The key point in all of the letters sent to states was that work requirements do not promote the objectives of Medicaid.

The August 10 actions follow a deliberate process by the Biden administration to unwind work requirements and remove burdensome barriers to Medicaid coverage. Efforts were set off by President Biden’s January 28 Executive Order “Strengthening Medicaid and the Affordable Care Act” which charged HHS with reviewing all agency actions for consistency with the administration’s policy including demonstrations and waivers “that may reduce coverage under or otherwise undermine Medicaid or the ACA.” Then as Joan Alker detailed, a few weeks later CMS withdrew the January 2018 State Medicaid Director letter on pursuing work requirements and sent letters to all eleven states with approved work requirements “preliminarily” disapproval notices.  The HHS Assistant Secretary for Planning and Evaluation subsequently issued a brief that found work requirement waivers carry significant risk of coverage loss and reduced access to care.

Prior to the work requirement recissions last week, CMS initiated similar withdrawals in six other states over the past few months (AR, AZ, IN, MI, NH and WI; see table below for more details). The most recent administrative actions nearly complete the administration’s push to eliminate the problematic policy that resulted in 18,000 individuals losing coverage in Arkansas and in other states, threatened the coverage of hundreds of thousands more.

Status of Approved Work Requirement Waivers

¹Work requirement vacated due to litigation.
² Implementation suspended due to ligation.
³ Implementation suspended due to Families First Act MOE effective 3/18/20.
⁴Nebraska’s work requirement has not been rescinded by CMS, but the state has announced its plans to withdraw its 1115 demonstration that included the requirements.

The administration seems to be moving onto the next step, addressing the pending requests to impose work requirements. There are currently six states with pending work requirements (ID, MS, MT, OK, SD, and TN), many of which exclusively target very poor parents in non-expansion states. CMS notified Montana that it will not include the requested authority for work requirements in the extension of the state’s “Health Economic Livelihood Partnership (HELP)”  demonstration.

Though progress has been made on unwinding work requirements, we are not out of the woods yet. There is still one outstanding state with an approved work requirement waiver — Georgia. However, Georgia has expressed its intent to delay the implementation of its demonstration until at least the end of this year, given the February 12 letter “preliminarily” disapproving the state’s work requirement. As we blogged about, Georgia’s work requirement was one of the harshest approved and would be especially burdensome on parents. Georgia is also in discussions with CMS about the state’s section 1332 waiver.

Additionally, Arkansas, which still has litigation of its work requirement pending  before the Supreme Court and has appealed CMS’s recission to the Departmental Appeals Board, is trying to find a work-around approach to the policy. While the state’s extension application is incredibly sparse on details and the Department of Human Services has said proposed provisions will not be a penalty, the Governor has expressed that instead of terminating people who don’t meet a work requirement, enrollment in private insurance health plans could be used as an “incentive” to get beneficiaries to work with enrollees being moved back to fee-for-service if they didn’t meet to-be-defined obligations. The state’s current 1115 demonstration is set to expire at the end of the year.

More work remains to be done in addressing and fighting back against problematic 1115 waiver policies that create barriers to coverage (i.e. premiums, lock-outs, elimination of retroactive coverage). But after three years of countless comments and efforts pushing back on punitive work requirements, we can exhale a bit that this saga is coming to a close.

[Since publication, Nebraska’s 1115 demonstration that included work requirements has been formally withdrawn.]