Medicaid Work Demonstrations: What Is at Stake for Older Adults?
To date, 12 states have proposed conducting demonstrations that add work requirements to Medicaid. The Centers for Medicare and Medicaid Services (CMS) has so far approved Section 1115 waiver proposals from Kentucky, Indiana, and Arkansas. Among other restrictions on coverage, these demonstrations would tie Medicaid benefits to a minimum work requirement (typically 80 hours per month). One of many questions that arises concerning implementation is how these requirements would affect poor older adults, many of whom have chronic medical conditions.
Work Requirement Exemptions
In policy guidance on work requirements released in January, the administration stated that it expects states to exempt people:
- who are “determined by the state to be medically frail” and
- with “acute medical conditions validated by a medical professional that would prevent them from complying with the requirements” of a work demonstration.
In an undefined exemption, the guidance also allows “access to appropriate Medicaid coverage and treatment services” for “people with opioid addiction and other substance use disorders.” CMS also notes that federal law may require states to modify work requirements to reasonably accommodate qualified individuals with disabilities. While CMS did not include guidance on an age exemption, most state proposals to date propose setting an upper age limit on their work requirements (see below).
A High Proportion of Older Low-Income Adults Have Compromised Health
Age exemption from work requirements should be carefully considered given that low-income working-age adults are significantly more likely than those with higher incomes to report being in fair or poor health or having at least one of five chronic conditions, including hypertension, heart disease, diabetes, asthma, or high cholesterol. And risk increases with age. By age 50, 70 percent of people below 200 percent of the federal poverty level report fair to poor health or having one or more chronic conditions; this percentage climbs to 83 percent by age 55.
One policy option would be to eliminate the work mandate for people age 50 and older, as three states have done. Another is to maintain the requirements to age 65, as Kentucky and others have done, but determine case by case who should be exempt because of "medical frailty."
Yet, in its guidance, CMS defines the term “medically frail” in broad terms. While existing federal regulations do define “medically frail,” it has an entirely different purpose in other federal Medicaid policy. It is used to identify ACA adult expansion beneficiaries with serious health conditions who are entitled to the full package of traditional Medicaid benefits rather than the more limited “alternative benefit plan” (which tracks the essential health benefits package and lacks Medicaid’s broader coverage of long-term services and supports) that most newly eligible beneficiaries receive. Under this definition, the overwhelming majority of older poor adults could be expected to be designated as medically frail.
To date, four states — Maine, Mississippi, Utah, and Wisconsin — have indicated that they intend to use a definition of medically frail that restricts the designation to people who cannot work at all. Whether CMS will permit such an extreme variation on the current standard remains to be seen.
Assuming that CMS insists on the current federal definition — which is broad enough to encompass people with activity-limiting impairments but does not require total disability — sicker older adults will need to continually provide updated clinical evidence to maintain their exemption. Claiming the exemption will, of course, be equally burdensome for younger people in fair to poor health. But given that chronic conditions are more common among older adults, failing to exempt people 50 and older as a group will not only greatly increase the number of people in poor health facing the burden of a medical exemption justification but also will add to the strain placed on physicians and clinics serving medically underserved communities, who could face the prospect of thousands of medical exemption reviews.
To be sure, employment and training supports that can help adults with activity-limiting physical and mental health conditions are of potentially great value. In fact, if states offer such supports (Kentucky approval requires only that the state make a “good-faith” effort to connect people with employment support services), then federal law arguably requires that any services available be reasonably accommodated to people with disabilities. But to threaten thousands of older poor adults with health problems with the loss of benefits is not only bad public policy, it presents an enormous cost and administrative burden for states and for health care providers.