States Are Reconsidering Restrictive Medicaid Waiver Policies

New governors and legislatures in Maine, Michigan, New Hampshire, and New Mexico are taking steps to protect access to health care for thousands of low-income Medicaid beneficiaries by reconsidering restrictive policies that their predecessors put in place through federal waivers, such as taking Medicaid coverage away from people who don’t meet rigid work requirements and imposing premiums and high cost-sharing.

Mounting evidence from Arkansas shows the disastrous impact that work requirements in particular have on coverage. Since Arkansas became the first state to implement Medicaid work requirements in June, more than 1 in 5 beneficiaries subject to the new policy have lost Medicaid and likely became uninsured. Many of those losing coverage are working people and people with serious health needs who can’t overcome the red tape that these policies create. In fact, the number of people losing Medicaid coverage exceeds the number of those that this policy presumably targets — that is, those not working or not exempt from the requirement.

In light of this and other evidence about the harm of restrictive waiver policies:

  • Maine withdrew a waiver that would have let the state take its Medicaid coverage (known as MaineCare) away from low-income parents for not meeting a work requirement. In her letter to the federal Centers for Medicare and Medicaid Services (CMS), the state’s new governor, Janet Mills, wrote that the waiver likely would have left “more Maine people uninsured without improving their participation in the workforce.” In place of these policies, Governor Mills is directing the state’s Labor and Health and Human Services Departments to work together “to make available vocational training and workforce supports to MaineCare participants at every opportunity, while increasing access to needed services that will keep them in the workforce.”
  • Michigan’s new Governor, Gretchen Whitmer, recently wrote to CMS expressing alarm that the state’s work requirement policy will cause between 61,000 and 183,000 Michiganders to lose health coverage. She noted that, in Arkansas, “many [enrollees] lost coverage simply because they had not heard or did not understand how to comply [with the requirement],” and that “Michigan’s statute is more sweeping than Arkansas’s waiver, threatening a broader range of adults with more exacting reporting demands.” State law requires Governor Whitmer to carry out the Medicaid waiver, but she urged the legislature to make changes that encourage work “without undermining the health or the finances of hard-working Michiganders.”
  • New Hampshire is poised to become the next state to implement work requirements, with coverage losses under its waiver potentially beginning in August. Moreover, its work requirement policy, like Michigan’s, is even harsher than Arkansas’. The legislature’s new Democratic majority, however, is considering changes ranging from repeal to a “trigger” provision in which the state would stop implementing the work requirement if more than 500 people lost coverage, or if the state’s providers saw an increase in uncompensated care due to people losing coverage. It’s also considering restoring retroactive coverage, under which Medicaid retroactively covers the care of those who enroll for the three months prior to their enrollment, if they were eligible for Medicaid during those three months. This provision serves as an important Medicaid protection to both beneficiaries and providers as it helps prevent medical bankruptcy, provides greater financial security, and reduces uncompensated care.
  • New Mexicos new governor, Michelle Lujan Grisham, announced that along with restoring retroactive coverage, she won’t impose a monthly premium on about 50,000 adults who gained coverage through the state’s Medicaid expansion (under the Affordable Care Act). Nor will she impose co-payments for non-emergency use of a hospital’s emergency department (ED) and for non-preferred prescription drugs, which would have affected about 645,000 Medicaid beneficiaries. Premiums reduce enrollment in coverage, and co-payments often prevent Medicaid beneficiaries from accessing needed medical care. Moreover, evidence from Indiana’s Medicaid waiver shows that a high co-payment on non-emergency use of the ED doesn’t work to reduce such use. The governor stated that moving forward with these policies “would limit access to emergency services [and] prescription services, and disrupt continuity of coverage for hundreds of thousands of New Mexicans…”

Restrictive Medicaid waiver policies don’t work, as evidence shows. Not only do they create significant coverage losses — the exact opposite of Medicaid’s primary objective of providing coverage to low-income people — but they also create barriers to accessing needed medical care. The new policymakers in Maine, Michigan, New Hampshire, and New Mexico are right to reconsider these harmful policies.