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A work requirement for some Wisconsin Medicaid recipients has been put on hold and will likely be scrapped following action by the Biden administration.
The decision was welcomed Monday by health care advocates, who said that the requirement violated the underlying objectives of the federal Medicaid program, which in Wisconsin is called BadgerCare.
“The purpose behind Medicaid is to expand health care coverage,” says Bobby Peterson, of ABC for Health, which advocates for people seeking health care and health care coverage. “It’s not to develop work programs.”
On Friday, as part of President Joe Biden’s continued unwinding of Trump administration policies, the federal Center for Medicare & Medicaid Services (CMS) told Wisconsin’s Medicaid division that federal approval for the state’s work requirement was being withdrawn. In a letter, the CMS acting administrator stated that allowing it to go forward “would not promote the objectives of the Medicaid program.”
“Medicaid is a lifeline to millions of people across the country — people with disabilities and older adults, low-income people who are working low-wage jobs and kids,” says William Parke-Sutherland, who coordinates health policy for Kids Forward, a Wisconsin family policy advocacy group. “These kinds of bureaucratic red-tape-like work verification requirements make it harder for people to access health care. Especially in a global pandemic, health insurance and access to health care is more important than ever.”
Evidence supports the change, according to the former director of the Robert M. La Follette School of Public Affairs at the University of Wisconsin. “In short, work requirements don’t help work, but they do push people off health insurance,” says Donald Moynihan, who is now a professor of public policy at Georgetown University.
Instituted under Walker
Wisconsin’s BadgerCare work requirement was a product of former Gov. Scott Walker’s administration that Walker and the Republican-led Legislature forced Walker’s successor, Gov. Tony Evers, to keep in place. It would have taken effect in 2020 before the COVID-19 pandemic led to a temporary halt.
The requirement, which the Walker administration labeled as the “community engagement requirement,” specified that adults without children who applied for BadgerCare would have to document at least 80 hours a month of either work, education, job training or community service in order to stay eligible for health coverage. The requirement was part of Walker’s 2015-2017 budget; the Trump administration CMS approved the state’s application for a Medicaid waiver to impose the work requirement and other restrictions in October 2018.
Evers defeated Walker that November. In December, before Walker left office, he signed legislation passed by the Republican majority in the state legislature that blocked Evers from canceling the requirement.
Because of that law, the Medicaid Division in the state Department of Health Services (DHS) spent the first year of the Evers administration drawing up details of the requirement.
In March 2020, however, Congress passed the Families First Coronavirus Response Act (FFCRA), the first of two federal laws to address the emerging pandemic. FFCRA included a 6.2% boost in federal Medicaid dollars to the states during the federal public health emergency.
In return for that additional money, the law requires the states to keep recipients on Medicaid who had enrolled by March 18, 2020, or after that date. That provision prevented the work requirement from taking effect.
The Biden administration has indicated that the federal health emergency will run through the current year. Even after the emergency ends, however, the new administration is signaling its disapproval of barriers that prevent people from getting health care coverage.
“CMS has serious concerns about testing policies that create a risk of a substantial loss of health care coverage in the near term,” states the CMS letter. “The COVID-19 pandemic has had a significant impact on the health of Medicaid beneficiaries.” A second letter states that the agency will disregard a last-minute Trump administration order to prevent waivers from being withdrawn for nine months.
Loss of health coverage likely
The letter observes that applicants who are trying to fulfill the requirement will face challenges, including finding appropriate job training and access to transportation and child care necessary to hold a job — all of which make it more likely that additional people will be cut off from health care coverage.
“In addition, the uncertainty regarding the lingering health consequences of COVID-19 infections further exacerbates the harms of coverage loss for Medicaid beneficiaries,” the letter adds.
Federal courts have struck down Medicaid work requirements in other states, including Arkansas, New Hampshire and Kentucky. In the latter case, a Democratic governor subsequently withdrew the Bluegrass State’s requirement. The U.S. Supreme Court is scheduled to hear arguments in March in the state of Arkansas’ appeal of lower court rulings blocking its requirement.
In its 2017 waiver application, the Walker administration claimed that its work requirement would “help more Wisconsin citizens become independent so as to rely less on government-sponsored health insurance.”
But Moynihan, who has studied the use of administrative requirements to limit access to government benefit programs including Medicaid and unemployment insurance, says that courts have repeatedly held that “the statutory goal of Medicaid is to provide access to health insurance, not to increase labor force participation.”
The evidence was clear even before states began implementing Medicaid work requirements that they wouldn’t do what their framers said they would, Moynihan says via email.
Most people on Medicaid who can work are already working, and the number who are not — and would be “easily motivated” to start working because of a requirement — is much smaller than the number of people who would have to file reports verifying their work status, he continues: “The juice is just not worth the squeeze.”
Arkansas, he adds, bears that out.
“What we learned from Arkansas is that work requirements can have large effects in excluding people from health insurance, and that these effects are largely not because people are not eligible, but because they cannot manage the paperwork,” Moynihan says.
In four months, 17,000 Arkansas residents lost coverage because of the requirement — but 95% of them, according to one survey, either worked enough to meet the requirements or should have qualified for an exemption. The people who lost coverage often didn’t know about the requirement or didn’t understand if it applied to them, he says. And recipients required to complete work verification reports were only able to do so online — but one-third of them lacked access to the internet.
“The actions of the Biden administration to end the policy is wholly consistent with the empirical evidence about the effects of work requirements, and consistent with court rulings about the goals of Medicaid,” Moynihan concludes.
The CMS letter to Wisconsin focuses on the work requirement, but advocates hope that other Walker-era restrictions will also come under scrutiny in the Biden administration, such as required copayments and time limits for recipients.
“I certainly hope that CMS will look at our waiver requirements with fresh eyes,” says Parke-Sutherland, “and a mind toward the goal of making sure more people have access to affordable health care.”
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