Medicaid's work requirement crunch arrives

Massive changes to Medicaid eligibility are entering a new phase as states begin implementing new work rules and patients face the first real risk of losing coverage.

The big picture: The crunch period has started for states to get the word out and set up systems for many Medicaid enrollees to report at least 80 hours a month of work, school or volunteering or get an exemption.

• "If that goes wrong, people are going to be really, really upset, and that is a political firestorm that nobody wants," said Matt Salo, a health care consultant and former executive director of the National Association of Medicaid Directors.

Driving the news: In Nebraska this week, Medicaid enrollees who fail to report their community engagements will start to lose coverage.

• Reporting requirements are reportedly already causing confusion for Medicaid enrollees in the state, which is the first to implement requirements well ahead of the Jan. 1 national deadline.
• The state's Medicaid director said about 200 people will lose coverage this week, and each denial is being reviewed multiple times before enrollees are notified, the health policy podcast "Tradeoffs" reported.
• Projections show as many as 7 million nationwide could lose coverage as a result of work requirements in 2028.

What they're saying: Patients, providers and advocates flooded the administration with tens of thousands of comments last week, urging changes to its directions for how states must implement the work requirements passed by Congress last year.

• Many raised concerns that the disability and illness exemptions are inadequate.
• The American Cancer Society released new survey results showing that 90% of cancer patients and survivors said they had to miss work, school or volunteering gigs as a result of their illness.
• Three-quarters said it would be hard to successfully submit paperwork to prove they worked or get an exemption during treatment.

State of play: Providers are getting anxious, too. The rules for state implementation of work requirements will push responsibility for determining medical exemptions onto clinicians, who are already overburdened by paperwork.

• "Physicians are trained to diagnose and treat medical conditions — not to conduct vocational or occupational assessments regarding an individual's ability to satisfy government work reporting requirements," the American College of Physicians wrote in a comment letter to the Centers for Medicare and Medicaid Services.
• ACP noted that many doctors are already no longer seeing Medicaid enrollees because of the administrative burden. The group asked officials to authorize broader categorial exclusions using claims data that already exists, as well as give states flexibility to determine how they figure out medical exemptions.

The other side: "As with all rulemaking, CMS will carefully review and consider all timely submitted comments as part of the rulemaking process and will determine whether any changes are appropriate in future rulemaking," Health and Human Services spokesperson Emily Hilliard said.

Zoom out: The comments came as a federal judge in Massachusetts declined a request from half of the states to halt the implementation directions.

• The Democrat-led states' lawsuit against the Trump administration centers on its rules for medical frailty exemptions from work requirements, which the states argue are more restrictive than Congress intended.
• Other Medicaid enrollees, including parents of young children and the elderly, are exempt from the requirements regardless of their health status.

Reality check: Work requirements are just one pressure point facing state Medicaid programs and their enrollees, said Robin Rudowitz, senior vice president at KFF.

• The Trump administration is also freezing funds for some state Medicaid programs under suspicion of fraud.
• Tighter state budgets, financing changes from last summer's legislation and looming midterm elections are creating "a perfect storm," Rudowitz said.
• "We're all very focused on work requirements and these are huge, big changes for the program," she said. "But that's happening in the context of many other things."