December 13, 2019

CMS on Thursday approved two separate Medicaid waiver requests from South Carolina, a state where officials have not expanded Medicaid under the Affordable Care Act (ACA), to impose work requirements on certain Medicaid beneficiaries and change eligibility limits for adults with minor children.

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CMS' decision to approve the work requirements waiver suggests the agency has no plans to halt efforts to reshape the Medicaid program, despite legal challenges that have prompted a growing number of states to pause efforts on Medicaid work requirements.

The approval also marks the second Medicaid work requirement request that CMS has approved for a state that did not expand Medicaid under the ACA. CMS last year approved a Medicaid waiver request from Wisconsin, which also has not expanded Medicaid under the ACA, to impose Medicaid work requirements. However, as part of that waiver, Wisconsin is expanding Medicaid coverage to individuals with incomes up to 100% of the federal poverty level (FPL).

Details of South Carolina's waivers

South Carolina's approved waivers will allow the state to require certain able-bodied Medicaid beneficiaries to either be employed or enrolled in job training or school for an average of 80 hours a month to qualify for coverage. The beneficiaries will have to report their hours quarterly to the state either online, through fax, or in person.

South Carolina's Medicaid work requirements differ from those in other states because South Carolina would not completely end a beneficiary's coverage and require the beneficiary to re-enroll in Medicaid if the beneficiary does not meet the requirements. Instead, in instances where beneficiaries fail to meet the requirements for three consecutive months, the state would suspend those beneficiaries' coverage for three months or until they meet the requirements.

South Carolina's waivers will apply the state's Medicaid work requirements to two groups of low-income individuals who previously did not qualify for Medicaid under the state's eligibility requirements. Specifically, the work requirements will apply to:

  • Certain adults who are homeless, need substance use disorder treatment, or are involved with the criminal justice system; and
  • Parents with minor children or other caretakers with incomes between 62% and up to about 100% of the FPL—up slightly from the state's current eligibility threshold of parents with minor children or caretakers with incomes up to 67% of the FPL.

According to the New York Times, South Carolina's new system will expand Medicaid eligibility to about 32,000 parents with incomes up to FPL, which is $24,540 for a family of three. At least one adult in a two-parent household will be required to meet the work requirements to qualify for the expanded coverage. In addition, about 14,000 adults who meet the new criteria for homelessness, substance use disorder treatment, or are part of the criminal justice system will become eligible for Medicaid if they meet the work requirements or qualify for an exemption.

For instance, the state will exempt from the requirements beneficiaries who are disabled, enrolled in a substance use disorder treatment program, full-time caregivers, pregnant women, and some others.

In total, CMS estimated the state's waivers could add an estimated 45,000 additional South Carolina residents to its Medicaid program.

The waivers are set to take effect July 2020.

Reaction

Gov. Henry McMaster (R) said, "In this economy, there is no excuse for the able bodied not to be working." He continued, "Competition for workers is fierce and businesses are struggling to fill vacancies."

CMS Administrator Seema Verma said, "South Carolina's requirements—complete with appropriate protections—will lift South Carolinians out of poverty by encouraging as many as possible to participate in the booming Trump economy."

But Sen. Ron Wyden (D-Ore.) said, "South Carolina already has one of the strictest Medicaid programs in the country," adding, "Thanks to [President] Trump, new and existing parents stand to lose their health coverage unless they hack their way through arbitrary and slapdash paperwork requirements."

Joan Alker, executive director of the Center for Children and Families at Georgetown University, said South Carolina's approved waiver request for work requirements might be more vulnerable to legal challenges than similar requests because the requirements apply to low-income parents, which are a mandatory coverage group.

A coalition of 21 consumer and patient groups on Thursday issued a statement denouncing the Trump administration's decision to approve the South Carolina's waiver requirements. The American Academy of Pediatrics, the National Association of Pediatric Nurse Practitioners, and other groups in the statement wrote that the waiver "does nothing to help parents living in or near poverty to overcome the barriers they face in obtaining jobs, such as providing affordable, quality childcare and job training, but instead adds red tape burdens that will fall squarely on parents' shoulders."

Officials from National Health Law Program (NHeLP), which has filed lawsuits over the approval of Medicaid work requirements in other states, said NHeLP is exploring whether to take legal action against the approval of South Carolina's waiver.

Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, said her group also is considering legal action. "We are looking at all administration and litigation options that are out there … to protect the Medicaid recipients of South Carolina. Just because you're pretending to offer something, but then you're taking it away [through] these work requirements and administrative barriers, how is this opening up?" she said (Meyer, Modern Healthcare, 12/12; King, FierceHealthcare, 12/12; Owens, "Vitals," Axios, 12/13; Weixel, The Hill, 12/12; Goldstein, Washington Post, 12/12; Goodnough, New York Times, 12/12).

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