Medicaid program managers in Washington want to require many adults who have Medicaid coverage to work or engage in work-like activities at least 80 hours per month.
The Centers for Medicare & Medicaid Services—the U.S. Department of Health and Human Services agency that oversees Medicaid—has posted an interim final rule that shows how the new work requirements would work.
The requirements would apply to able-bodied adults. Affected Medicaid enrollees could meet the requirements by engaging in paid work, working as a volunteer, participating in a government work program, or going to school.
Medicaid enrollees could also get exemptions from the “community-engagement” requirements if they were acting as caregivers for young children or adults with disabilities.
Analysts are predicting that the new requirements could lead to 4.4 million people to 5.4 million people being “moved to engagement.”
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What it means: CMS regulation impact analysts do not talk much about how the work requirements might affect employers or their health benefit plans.
Benefits sector players may have to wait until the requirements are in effect to see whether the requirements affect employers’ plans.
Will new Medicaid rules help people find work or increase ranks of uninsured?
Supporters of the new rules say the rules could give many low-income people extra help with finding work and, ultimately, improve those people’s lives.
Meanwhile, critics argue that the rules could increase the number of uninsured people, potentially increasing employer plan costs by putting pressure on doctors and hospitals in a community to cope with a drop in paying patients by charging commercial plans more.
An analyst at the Paragon Institute, a think tank popular with Republicans, has argued that many assertions about cost-shifting turn out to be incorrect, and that there is little evidence that spending caps on programs like Medicaid and Medicare have had much effect on the prices that employer-sponsored health plans and other commercial plans pay for care.
Experts: Move could mean surge of applicants for lower-wage jobs
Leighton Ku and other policy analysts predicted in a commentary published by the Commonwealth Fund that few Medicaid enrollees affected by a new work requirement will get paid work that offers employer-sponsored health benefits.
If Ku and his colleagues are correct, employers in areas with many able-bodied adult Medicaid enrollees could get a surge in job applications from people who are willing to work for a low wage and will come in with Medicaid coverage in place.
Employing those people could be cheaper than employing similar workers who need cash to pay their share of the premiums for health coverage purchased through a state’s Affordable Care Act public exchange program.
But, because those workers will be people who have a strong interest in keeping Medicaid coverage in place, the workers could be more likely to have chronic health problems than typical new hires.
If the new workers who come in as a result of Medicaid work requirements are unusually likely to have multiple chronic conditions, such as a combination of obesity and high blood pressure or obesity and diabetes, that could increase the affected employers’ workers’ compensation claim costs.
Injured workers with multiple health problems end up with a 76% longer claims duration than other injured workers and a 341% increase in total incurred costs, according to Harbor Health Systems’ data cited by One Call Care Management.
Adding workers who come in with an unusually high rate of chronic health problems could also end up increasing claim costs at any traditional group life or group disability plans the employers offer.
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