Kentucky will now require many of its Medicaid recipients to work for their benefits, the first time ever a state has been permitted to impose such a requirement.
The state announced Friday that it received federal approval to mandate certain Medicaid enrollees to hold jobs or participate in other employment activities for 80 hours a month. The decision came a day after the Centers for Medicare & Medicaid Services unveiled guidelines for states to file for work requirement waivers.
Also, Kentucky can start charging its Medicaid enrollees monthly premiums ranging from $1 to $15, depending on income, and suspend some of those who fall behind in payments. The state will also provide recipients with a high-deductible health savings account, which it will fund, and offer incentives to purchase additional benefits, such as dental and vision coverage.
The work requirement, which will take effect in July, will apply to all able-bodied, working-age adults who are not pregnant, medically frail, full-time students or primary caregivers of dependents. About 350,000 Kentucky residents will be subject to this mandate, but about half of them have jobs or are in other activities that would satisfy the requirement.
In addition to working, recipients can meet the requirement by volunteering, participating in job training or job searching and taking classes.
Allowing states to impose work requirements is a historic shift in the 53-year-old federal health insurance program for the poor, but not an unexpected one.
Republicans have long wanted to add work requirements to the Medicaid program, which covers nearly 75 million low-income children, adults, elderly and disabled Americans. The broadening of Medicaid to low-income adults under Obamacare -- roughly 11 million have gained coverage under the health reform law's Medicaid expansion provision -- further spurred GOP efforts.
However, the Obama administration did not approve any state waivers that would impose work mandates, saying it was not in keeping with the program's mission to provide access to medical services. Consumer advocates and health policy experts fear that such a requirement could prove a big hurdle for many recipients, leaving them without the care they need.
The Trump administration swiftly signaled that it held a different view. Seema Verma, the CMS administrator, sent a letter to governors hours after after she was confirmed in March urging them to apply for such waivers.
Kentucky's Medicaid overhaul is expected to be challenged swiftly in court. Consumer advocates say work requirements are contrary to Medicaid's mission to provide access to health care. They are concerned that low-income adults will lose access to the program because they are too sick to work, even though they are not classified as disabled, or because they get tripped up by the documentation requirements.
Kentucky officials project that between 90,000 and 95,000 fewer people will be in the state Medicaid program at the end of the five-year waiver period.