Not 'Subversive': Verma Defends Medicaid Work Requirements

The CMS administrator says the Trump administration is committed to giving states the flexibility they need to contain their Medicaid costs, even as some critics suggest that regulating the work requirement will cost more money than it saves.

Centers for Medicare & Medicaid Services Administrator Seema Verma on Thursday offered a robust defense of the Trump administration's work requirements for "able-bodied adults" on Medicaid.

"There is dignity and pride that is derived from work—for paying one's own way—and I believe it is the desire of nearly every American to achieve financial independence," Verma said in remarks before the 2018 Medicaid Managed Care Summit.

"Let me be clear, there is no shame in receiving extra help when it’s needed—that's why we have a safety net to care for folks on hard times," Verma told the summit. "But our default position must always be to help and encourage those who are able to lift themselves up and find their footing again."

In January, CMS put forward guidelines for states seeking waivers for Medicaid work requirements. So Far, CMS has approved work-requirement waivers for Arkansas, Indiana, New Hampshire, and Kentucky, although that state's waiver was later vacated by a federal court. CMS is reviewing waiver proposals from seven other states.

Critics of the work requirements dismiss them largely as either a stunt or a back doorway to pare the Medicaid rolls.

The Centers on Budget and Policy Priorities has said the work requirements will kick many low-income adults off Medicaid "including people who are working or are unable to work due to mental illness, opioid or other substance use disorders, or serious chronic physical conditions, but who cannot overcome various bureaucratic hurdles to document that they either meet work requirements or qualify for an exemption from them."

Verma said Thursday she has heard the criticism and faced resistance to the work requirements.

"But I reject the premise, and here is why: it is not compassionate to trap people on government programs, or create greater dependency on public assistance as we expand programs like Medicaid," she said.

"Community engagement requirements are not some subversive attempt to just kick people off of Medicaid," Verma said. "Instead, their aim is to put beneficiaries in control with the right incentives to live healthier independent lives."

Verma said the policies used to determine work eligibility for Medicaid enrollees "are not blunt instruments."

"We’ve worked carefully to design important protections to ensure that states exempt individuals who have disabilities, are medically frail, serve as primary caregivers, or have an acute medical condition that prevent them from successfully meeting the requirement," she said.

It's not clear how many Medicaid enrollees would be affected by the work requirements. A study from the Kaiser Family Foundation suggested in June that the impact would be negligible because only 6% of Medicaid enrollees targeted by the work requirements aren't already working and are unlikely to qualify for an exemption.

"Most working Medicaid enrollees are working full-time for the full year and are working in low-wage service jobs with limited benefits such as sick time or health coverage," the Kaiser study said.

Verma rejected that assertion.

"Some have argued that these demonstrations are unnecessary because nearly all Medicaid beneficiaries are already working," she said. "To that I say—great. Then this policy won’t impact them."

In addition, Kaiser said work requirements for Medicaid would also require states to establish complex and potentially expensive verification processes to track enrollees which could not be paid for with federal Medicaid funds.

In other words, the work requirements could potentially cost states more money than they save.

Verma noted that federal spending on Medicaid grew by more than $100 billion between 2013 and 2016, and is a top budget expenditure for many states.

"We have a responsibility to make sure that taxpayer dollars are spent only on qualified services for those who are truly eligible, even as we return greater control of the Medicaid program to the states," she said.