Managed care group encouraged by ground rules for Medicaid work requirements

Seema Verma speaking at press conference
CMS Administrator Seema Verma believes work requirements will help lift Medicaid beneficiaries out of poverty, but some advocates aren't so sure. (

While the Trump administration’s new guidance on Medicaid work requirements sparked outrage from some, the head of a trade group for managed care plans saw reasons for optimism in the fine print.

“What we saw in the CMS guidance yesterday addresses two very big issues,” Medicaid Health Plans of America CEO Jeff Myers told FierceHealthcare in an interview Friday.

RELATED: New CMS guidance paves way for states to test Medicaid work requirements

For one, the Centers for Medicare & Medicaid Services essentially told states that if their Medicaid enrollment drops because of the new eligibility criteria, they can’t count that as proof that their demonstration waiver saved money.

“What that signals is very clear—that CMS does not want states to use work requirements or other new enrollment criteria solely and only to reduce coverage,” Myers said. 

That said, managed care plans do want to see people "move up the economic ladder" so that they no longer need Medicaid, he said, adding, "I don’t think the plans are concerned that the amount of people they cover is going to shrink.”

Second, Myers said he’s reassured by the fact that CMS said a large portion of the Medicaid population—such as those who are medically frail, pregnant or disabled—should be exempt from work or other “community engagement” requirements. That, and the fact that CMS said states must make "reasonable accommodations" for those undergoing treatment for substance abuse, addresses some of Myers' concerns about the effects work requirements could have on Medicaid beneficiaries. 

RELATED: States must consider hidden costs of work requirements, says Medicaid Health Plans of America CEO

However, he urged states to consider the costs associated with any individuals who do end up losing Medicaid coverage because they fail to meet new eligibility standards imposed by states.

“Remember, those people are still going to need healthcare. If you take them off Medicaid and they show up in the emergency room, that’s not free,” Myers said. “The funding fairy doesn’t just show up to pay for that—that is a taxpayer requirement.”

An ‘attack on Medicaid’

Some stakeholders had sharper criticism than Myers for the new guidance on Medicaid work requirements.

Debra Ness, president of the National Partnership for Women & Families, said in a statement that the move “is just one more in a string of shameful, relentless attacks on Medicaid—and all those who rely on it—by an administration and congressional leaders who are deeply hostile to those in need.”

“And, ironically,” she added, “as people lose their Medicaid coverage, it will become even more difficult for them to get and hold jobs.”

Sen. Ron Wyden, D-Ore., also signaled his opposition, writing on Twitter that the administration is “going after people who are just trying to get by.”

“With this decision, President Donald Trump and his administration have ended the Medicaid guarantee as we know it,” added Winnie Stachelberg, executive vice president for external affairs of the Center for American Progress.

Practical, legal concerns

Other experts raised questions about the practicality of how states would go about implementing Medicaid waivers that include work requirements.

“For states, the guidance creates significant administrative complexity and cost—especially related to the infrastructure needed to assess Medicaid beneficiaries for their capacity to work,” Patricia Boozang, senior managing director at Manatt Health, said in an emailed statement.

The “strict program parameters” that CMS outlined may also be challenging for states, she said, noting that the agency “clearly rejects the idea that Medicaid would pay for child care, transportation or any of the other supportive services that would make it easier for people to work.”

Then there is the specter of legal challenges that could arise if one of the 10 states that has applied for a work-requirements waiver has its application approved.

In a letter sent this week to CMS, the National Health Law Program says the Trump administration’s move puts it on “wobbly legal ground.”

“As our letter explains, the administration is making an about-face in its efforts to overturn established HHS policy against work requirements without public comment,” Jane Perkins, the group’s legal director, said in a statement.