The Administration followed up on earlier reports of new work requirements under Medicaid. On Thursday, January 11, CMS unveiled guidance allowing states for the first time in Medicaid’s 52 year history to impose work requirements on people who are covered by Medicaid health insurance. Some groups are exempt such as pregnant women, disabled and elderly populations but even subtracting the large numbers of individual who already working or are exempt it could still have an impact on certain adults who do not get covered by such exemptions and who are not working., This could include some young people who had aged out of foster care.

According to an analysis by Kaiser Family Foundation,

“…among the nearly 25 million non-SSI adults (ages 19-64) enrolled in Medicaid in 2016, 6 in 10 (60%) are working themselves. A larger share, nearly 8 in 10 (79%), are in families with at least one worker, with nearly two-thirds (64%) with a full-time worker and another 14% with a part-time worker; one of the adults in such families may not work, often due to caregiving or other responsibilities.”

Despite this there are some adults who could be hurt by the state actions. Under the ACA, young people who aged out of foster care are eligible to age 26 for Medicaid coverage—at least in the state they lived while in foster care. These young people, according to some surveys and research, are frequently unemployed for part of their immediate post-foster care lives. Some of these same surveys indicate these young people are more likely to lack a high school degree.
These young people, not covered by state exemptions, and having more difficulty finding a stable job and place to live could fall victim to the same state system that may have failed them while in foster care. Looking at the Kaiser Foundation information, about 38 percent of these non-elderly adults under 26 years of age are unemployed. In addition, 42 percent lack a high school degree.

Already Kentucky received the go-ahead to implement new work requirements. There are at least nine other states that have already applied: Arizona, Arkansas, Indiana, Kansas, Maine, New Hampshire, North Carolina, Utah and Wisconsin. These states, like Kentucky, had all submitted waiver request before the guidance. All the states have Republican governors but there are reports that Louisiana would be joining the group.

Kentucky’s waiver will add to the federal guidance restrictions or exemptions. The state will exempt “medically frail” individuals including with cancer, blood-clotting disorders, or alcohol or substance abuse disorders. But it’s clear the goal is to reduce Medicaid coverage, Kentucky expects that 95,000 fewer people will have Medicaid at the end of the five-year waiver period. Presumably these able-bodied adults will find jobs that provide health insurance.

States applying for the waiver are arguing the mandate will help people improve their individual health and states, such as Kentucky, are allowing these adults to complete 80 hours a month of community engagement to qualify for coverage. The engagement could include work, education, community service or job training.

The CMS guidance offers up a rationale that some might be described as a “chicken or egg” argument. The guidance states:

“…higher earnings are positively correlated with longer lifespan. One comprehensive review of existing studies found strong evidence that unemployment is generally harmful to health, including higher mortality; poorer general health; poorer mental health; and higher medical consultation and hospital admission rates.” Others will argue that having a chronic or other health condition may make it difficult to hold a job because they don’t have health care. Some of the other questions on this policy include:

• The reality that Medicaid programs and caseworkers are not focused on job placement activities. The state would have to make sure another agency, such as a TANF agency, could assist that individual.
• TANF has lost more than a third of its value due to block grant cuts and inflation and this population may not be a priority for TANF agencies.
• In a recession when work exemptions are most needed some states might resist not wanting to increase their Medicaid budget just as that recession puts pressure on that state budget.
• Some states have, on occasion, used such requirement including work mandates or drug testing as a deterrent to discourages individuals from even applying to programs (i.e. TANF). This could be the case with health coverage through Medicaid.
• The Kentucky plan may also raise other barriers such as how would an individual substantiate that they have a drug or alcohol addiction to get an exemption that would allow them to access the substance use coverage Medicaid can provide?

And what of youth formerly in foster care who aged out of care? The ACA mandates states to provide Medicaid to age 26—at least in the state they lived in while in foster care. As of 2015, only 12 states have extended this coverage to young people who have moved from another state. Think of the youth that move if they go to college or live in a region like Washington DC that has three jurisdictions within a forty-five-minute drive.

If only a dozen states have taken the initiative to extend Medicaid to this population, what is the likelihood they will assist them on this new Medicaid restriction? In 2016, 20,789 young people “age-out” of care—most at age 18. That is building the numbers of eligible youth each year.