February 17, 2021

The Biden administration is starting to roll back Medicaid work requirements

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    The Biden administration on Friday began rolling back Medicaid work requirements approved by CMS under former President Donald Trump's administration.

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    About Medicaid work requirements

    In 2018, Seema Verma, who served as CMS administrator under the Trump administration, sent a memo to state Medicaid directors inviting them to submit waiver requests to incorporate work requirements into their Medicaid programs for non-elderly, non-pregnant adults without disabilities. Under the Trump administration, CMS approved requests from 13 states to implement Medicaid work requirements, according to a 15-page document obtained by the Washington Post that reportedly details the Biden administration's plan to rescind the Trump administration's Medicaid work requirement approvals.

    Arkansas was the only state to fully implement its approved Medicaid work requirements, however. The work requirements approved for Arkansas, Kentucky, and New Hampshire were challenged, and ultimately struck down, in court. In other states with approved Medicaid work requirements, courts have quickly stopped states from implementing the requirements or officials have put the requirements on hold as litigation over the requirements plays out, according to the New York Times. One case regarding Medicaid work requirements is currently before the Supreme Court, which is scheduled to hear oral arguments in the case next month, the Times reports.

    Despite the outstanding legal issues, Verma during her last weeks as CMS administrator invited interested states to sign a short contract with CMS to implement Medicaid work requirements. The contract would allow states a lengthier review process for Medicaid waivers that could be used to implement work requirements and would guarantee that states would get at least nine months of notice before CMS could withdraw a waiver, the Times reports.

    "We want to make sure that people don't come into office and on a political whim terminate waivers," Verma explained during an interview on the matter at the time.

    Biden admin rolls back Medicaid work requirements

    But on Friday, the Biden administration took two separate actions to begin rolling back waivers with Medicaid work requirements that were approved by CMS under the Trump administration.

    First, the Biden administration notified states with approved Medicaid work requirements that CMS now plans to withdraw those approvals. Second, the Biden administration withdrew CMS' invitation for states to seek approval for Medicaid work requirements.

    In letters sent Friday to states with approved Medicaid work requirements, CMS noted that Medicaid work requirements are particularly inappropriate during America's coronavirus epidemic, when many Americans have become unemployed and others have gotten sick and required health care. "CMS has serious concerns about testing policies that create a risk of a substantial loss of health care coverage in the near term," the letters state.

    According to Politico, it's unclear how the Biden administration plans to reverse the Trump administration's approvals for Medicaid work requirements. However, the Times reports that the HHS secretary has the power to withdraw Medicaid waivers, because the waivers are discretionary. Under longstanding guidance, states that oppose the withdrawal of a waiver can request a hearing before the decision is finalized, however, according to the Times.

    CMS appeared to acknowledge that possibility in the letters sent Friday, informing states that they had 30 days to raise objections to the agency's cancelation of their Medicaid work requirement waivers.

    In addition, in a separate letter sent to states on Friday, current acting CMS Administrator Liz Richter wrote that the agency would be rescinding Verma's offer to provide states with at least nine months of notice before withdrawing a waiver, stating that the move would not provide CMS with enough "flexibility" (Kliff/Sanger-Katz, "The Upshot," New York Times, 2/12; Diamond/Goldstein, Washington Post, 2/11; Cancryn, Politico, 2/11; Brady, Modern Healthcare, 2/12).

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