Sharply reversing longstanding federal policy, the Centers for Medicare & Medicaid Services (CMS) announced today that states may block some low-income adults from getting Medicaid coverage if they’re not working or participating in work-related activities. Under prior administrations, CMS (a part of the Department of Health and Human Services) rejected several state requests to tie Medicaid eligibility to such requirements, including Arizona’s 2016 request that CMS rejected because it “could undermine access to care and [does] not support the objectives of the Medicaid program.” CMS’ new guidance doesn’t provide a convincing rationale for the policy reversal, which could threaten Medicaid coverage for many adults and actually make it harder for some adults to succeed in the labor market due to their loss of health coverage.
Medicaid’s core mission is to provide comprehensive health coverage to low-income people so they can get needed health services. Section 1115 of the Social Security Act allows states to deviate from certain federal Medicaid requirements, but only when necessary to implement demonstration projects that promote Medicaid’s objectives.
The new guidance largely tries to justify Medicaid work requirements by citing research showing that people with jobs have better health and higher incomes than people without jobs. But that research doesn’t show whether employment causes improved health or rather, as is likely for many people, the causal relationship is in the other direction — namely, that healthy people are likelier to have jobs than those in poor health. (As one study that CMS cites explains, “Importantly, these findings do not necessarily imply that income has a causal effect on life expectancy: that is, giving someone more money may not increase their lifespan.”) Moreover, 36 percent of Medicaid beneficiaries who don’t qualify for federal disability assistance and who aren’t working report that it is a health condition that keeps them from working, the Kaiser Family Foundation reports (see chart).
– Center on Budget and Policy Priorities