The move opens the entryway for states to apply for waivers to enable them to require Medicaid enrollees to work with a specific end goal to get scope, something that has at no other time occurred in the 50-year history of the program.
The policy responds to numerous state requests to test programs through Medicaid demonstration projects under which work or participation in other community engagement activities - including skills training, education, job search, volunteering or caregiving - would be a condition for Medicaid eligibility for able-bodied, working-age adults.
The major policy shift seeks to overhaul the long-standing social contract between state and federal governments and poor citizens who rely on their services.
For instance, the guidance notes that some Medicaid recipients may have trouble meeting these requirements because of poor health, substance abuse or high unemployment in their areas.
"I see this as CMS giving states that are looking for flexibility, flexibility", Sudders said, using the acronym for the Centers for Medicare and Medicaid Services. For example, the guidance suggests that states could "count time spent in treatment toward [the work] requirement, or exempt a person going through inpatient or outpatient treatment from the requirement altogether". Health officials could approve the first waiver - probably for Kentucky - as soon as Friday, according to two people with knowledge of the process. Medicaid was expanded under former President Barack Obama, with an option allowing states to cover millions more low-income adults. "The most vulnerable people are the ones who need Medicaid coverage the most, and they will lose it", Pavetti said.
Seema Verma, administrator of the Centers for Medicare and Medicaid Services, speaks during a news conference in Newark, N.J. The Trump administration says it's offering a path for states that want to seek work requirements for Medicaid recipients.
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Critics say the rules could mean more Americans are left without health insurance.
"There are a lot of different ideas, and a lot of ways to go about this", she said.
The new policy requires states to fully comply with federal disability and civil rights laws while ensuring that individuals with disabilities are not denied coverage. To get around this, the 10-page letter argues that working promotes good health and repeatedly asserts that the change fits within the program's objectives.
Individuals eligible for Medicaid due to a disability, elderly beneficiaries, children and pregnant women would be excluded from any work or community engagement requirements, according to CMS, and the guidance also calls for "reasonable modifications for individuals with opioid addiction and other substance use disorders".
Many Medicaid recipients are already employed.
The Obama administration opposed state efforts to implement work requirements in Medicaid because it could result in fewer people having health insurance. Of those without a job, more than a third are ill or disabled, 30 percent are caring for young children, and 15 percent are in school, the analysis shows. States should ensure that career planning, job training, referral, and volunteering opportunities considered to meet the community engagement requirement, and job support services offered in connection with the requirement, take into account people's employability and potential contributions to the labor market.