Ohio Plans Medicaid Work Requirements as Trump Administration Appeals Ruling

Published June 7, 2019

Some Ohio enrollees in Medicaid, which provides medical assistance to low-income individuals, will be required to work to maintain their eligibility, though similar pilot projects in other states are facing federal court challenges.

Using what are called Section 1115 waivers, which must be approved by the federal Centers for Medicare and Medicaid Services (CMS), states are allowed to experiment with the design of their health care programs.

Under the Trump administration, CMS has approved waivers for individual states to require adult Medicaid recipients with incomes above the federal poverty level to work, participate in job training, or undertake “community engagement” activities such as volunteering.

Trump Administration Appeals Ruling

Ohio and several other states, including Kentucky and Arkansas, have received Section 1115 waivers from CMS, a division of the U.S. Department of Health and Human Services.

The Trump administration is appealing rulings by a federal court that have blocked the implementation of Medicaid work requirements in Kentucky and found a similar program already in place in Arkansas violates federal law.

The U.S. Department of Justice filed a notice of its petition to the U.S. Court of Appeals for the District of Columbia on April 10 to overturn two decisions by U.S. District Judge James E. Boasberg in the Kentucky and Arkansas cases.

New Hampshire’s Medicaid work waiver is being challenged in a separate case.

‘Medical Coverage’ Objective

Boasberg ruled against the Arkansas waiver in 2018, after which CMS revised and approved the project. In his March 27 opinion in Gresham v Azar, Boasberg ruled CMS had not answered his previous objections.

Boasberg said the waiver still did not address “coverage considerations” for individuals who were removed from Medicaid for failing to meet work requirements. “Given a second failure to adequately consider one of Medicaid’s central objectives, the Court has some question about HHS’s ability to cure the defects in the approval,” Boasberg stated in his decision.

In justifying the Kentucky waiver, CMS “did not address … how the project would implicate the ‘core’ objective of Medicaid: the provision of medical coverage to the needy,” Boasberg wrote in his March 27 opinion striking down the state’s plan in the case of Stewart v. Anzar.

Arkansas Gov. Asa Hutchinson says he supports the Trump administration’s challenge to the judge’s decision.

“Judge Boasberg is wrong, and I am urging the Department of Justice and Department of Health and Human Services to … seek an expedited appeal of this decision,” stated Hutchison in a March 29 press release.

‘Pathway to Full Employment’

Thirty-six states have expanded eligibility for Medicaid to persons with incomes up to 138 percent of the poverty level, as allowed under the Patient Protection and Affordable Care Act and a 2012 U.S. Supreme Court decision. Ohio expanded eligibility in 2014 to an estimated 540,000 people.

The Ohio waiver applies to those who became eligible under the expansion. There are no work requirements for Medicaid enrollees with below-poverty incomes, and Ohio’s plan exempts from work requirements people 50 years or older, individuals undergoing drug or alcohol treatment, pregnant women, and those fulfilling work requirements associated with other programs such as the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps.

The purpose of the demonstration project is to transition Medicaid enrollees to independence through work, says Ohio Gov. Mike DeWine.

“I am pleased that Ohio is a model state that balances a pathway to employment and access to health care in our reasonable work requirements,” stated DeWine in a press release after the CMS approval on March 15. “They are intended to put those able-bodied adults served by the Medicaid expansion on a pathway to full employment.”

Early Planning Efforts ‘Critical’

Ohio should not await the outcome of the Trump administration’s appeal before starting its program, says Rea S. Hederman, vice president of policy at the Buckeye Institute.

“If Ohio waits to implement its approved work and community engagement waiver, the benefits—such as higher lifetime earnings—that we found in our research … will be delayed or lost for many people on Medicaid,” said Hederman.

A 2018 Buckeye Institute study concluded work requirements could increase lifetime earnings by close to $1 million for individuals who transition off of Medicaid, and would increase lifetime earnings by several hundred thousand dollars for those who remain on Medicaid their entire working life.

Carefully planning the rollout of work requirements is important, says Hederman.

“In moving forward now, Ohio can develop an easy-to-use and understandable reporting process and they can begin to communicate with Medicaid recipients on how the new waiver will impact them,” said Hederman. “These early efforts by the state will be critical to ensure a smooth implementation process.”

Bonner R. Cohen, Ph.D. ([email protected]) is a senior fellow at the National Center for Public Policy Research.

Internet Info:

U.S. District Judge James E. Boasberg, memorandum opinion [Arkansas], Gresham v. Azar, Civil Action No. 18-1900, March 27, 2019: https://heartland.org/publications-resources/publications/opinion-memorandum-arkansas-medicaid-wavier-for-work-requirements

U.S. District Judge James E. Boasberg, memorandum opinion [Kentucky], Stewart v. Azar, Civil Action No. 18-152, March 27, 2019: https://heartland.org/publications-resources/publications/opinion-memorandum-kentucky-medicaid-wavier-for-work-requirements

Rea S. Hederman Jr., Andrew J. Kidd, Tyler Shankel, and James Woodward, “Healthy and Working: Benefits of Work Requirements for Medicaid Recipients,” The Buckeye Institute, December 3, 2018: https://www.buckeyeinstitute.org/research/detail/new-research-by-the-buckeye-institute-finds-work-requirements-would-increase-lifetime-earnings-for-medicaid-recipients