On January 11, 2018, the Centers for Medicare & Medicaid Services (CMS) issued new policy guidance to support states in their efforts to improve Medicaid enrollee health and well-being through incentivizing participation in community engagement activities. This guidance will assist states in pursuing Medicaid section 1115(a) demonstration authority to test incentives that make participation in work or other community engagement a requirement for continued Medicaid eligibility or coverage for certain adult Medicaid beneficiaries. The guidance is structured so that states understand the requirements and other programmatic and policy considerations for designing programs that meet the objectives of the Medicaid program, consistent with federal statutory requirements.
Frequently Asked Questions
What is the Centers for Medicare & Medicaid Services (CMS) announcing today?
Through a letter to State Medicaid Directors, CMS is announcing a new policy designed to support states in their efforts to strengthen the Medicaid program by allowing work and community engagement among non-disabled, working-age Medicaid beneficiaries to help them improve health and wellbeing and achieve economic self-sufficiency.
Why is CMS announcing this policy?
CMS is responding to numerous requests from states interested in pursuing innovative approaches to improve the health and wellbeing of their residents enrolled in Medicaid and help them rise out of poverty. To date, CMS has received proposals from ten states, represented by governors of both political parties, which include incentives for participation in work and community engagements activities. This guidance expresses CMS’ commitment to supporting these policies and outlines considerations for states to ensure that their proposals meet broader program objectives.
Who will this new policy affect?
CMS will support state efforts to design work and community engagement requirements around adult Medicaid beneficiaries that are non-elderly, non-pregnant, and that are eligible for Medicaid on a basis other than disability. As detailed in the guidance, states must take steps to accommodate certain individuals that may have difficult in meeting program requirements, such as individuals with disabilities, those with substance use disorders and those who have been certified by a medical professional as having a medical condition that would prevent them from meeting the requirements.
What authority does HHS have to approve state requests to include work and community engagement requirements in Medicaid?
Section 1115 of the Social Security Act gives the Secretary broad authority to waive certain Medicaid requirements for states that wish to test innovative approaches to serving Medicaid beneficiaries, provided that the Secretary determines that the state’s program is likely to assist in promoting the objectives of the Medicaid program.
How do work and community engagement requirements promote the objectives of Medicaid?
This policy is anchored in historic CMS principles that emphasize work to promote health and well-being. The Affordable Care Act (ACA) significantly expanded Medicaid eligibility to able-bodied adults, a population that has not historically been served by the program. This guidance is designed to give states the tools to address the needs of this population. While each demonstration will be evaluated independently, we have determined that community engagement incentives are likely to assist in promoting the objectives of the Medicaid program by improving the prospect that beneficiaries will experience improved health outcomes after obtaining sustainable employment, which will also help them to achieve self-sufficiency.
We believe that programs that incentivize community engagement have the potential to further Medicaid objectives to the extent they are designed to promote better mental, physical, and emotional health, and, separately, help individuals and families rise out of poverty and attain independence. While high-quality health care is important for an individual’s health, there are many other determinants of health. CMS recognizes that a broad range of social and economic factors can have a major impact on an individual’s health and wellness, and a growing body of evidence suggests that targeting certain health determinants, including productive work and community engagement, can improve health outcomes for the individual. Work and community engagement programs can also help individuals and families rise out of poverty.
CMS is committed to ensuring state accountability for the health outcomes produced by the program, and demonstration projects approved consistent with this guidance will be required to conduct outcomes-based evaluations that will allow CMS to track whether state interventions are achieving their objectives.
What is the reasoning behind aligning Medicaid work requirements with those from the SNAP & TANF programs?
CMS supports states’ efforts to align SNAP or TANF work or work-related requirements with the Medicaid program as part of a demonstration project, where such alignment is appropriate and is consistent with the ultimate objective of improving health outcomes for the Medicaid beneficiaries. Aligning certain requirements across these programs could reduce the burden on both states and maximize opportunities for beneficiaries to meet the requirements and achieve economic self-sufficiency.
I am a caregiver and unable to work. Will states be required to provide exceptions or protections for people like me?
States will have the flexibility to identify activities other than employment, that promote health and wellness, and will meet the states’ requirements for continued Medicaid eligibility. These activities include, but are not limited to caregiving, community service, and attending school. States may also choose to consider caregivers an exempted population, in alignment with TANF or SNAP work-related requirements.
What about those with disabilities?
The new opportunity for section 1115 demonstrations is limited to individuals who are eligible for Medicaid on a basis other than disability, automatically exempting those who are considered disabled for Medicaid purposes. In addition, the aged, children and pregnant women are not impacted by this policy. However, CMS is aware that there may be adults who qualify for Medicaid by other means. These individuals may be unable to meet the requirements or may need assistance to do so because of a disability. The community engagement policy reminds states of their obligation to comply with applicable federal civil rights laws, and provide for reasonable modifications in work and community engagement requirements for individuals with disabilities that impact their ability to meet the requirements.
How does this new guidance take into account individuals with Substance Use Disorder (SUD) or other health conditions that impact their ability to meet work/community engagement requirements?
First, states must create exemptions for individuals determined to be medically frail as well as individuals with acute medical conditions validated by a medical professional that would prevent them from complying with the requirements.
CMS also recognizes that many states currently face an epidemic of opioid addiction, which has been declared a national public health emergency by the Secretary. States will therefore be required to take certain steps to ensure that eligible individuals with opioid addiction and other substance use disorders have access to appropriate Medicaid coverage and treatment services. CMS has outlined examples of the types of reasonable modifications that states can include in their community engagement requirement policies for these individuals, including counting time spent in medical treatment towards an individual’s work/community engagement requirements, or exempting individuals participating in intensive medical treatment for SUD from the work/community engagements requirements altogether. States may also propose, for CMS consideration, other reasonable modifications in furtherance of their obligations under disability laws, and other strategies to support such individuals in meeting the requirements, and in obtaining access to SUD treatment.
If an individual does not meet a state’s work and community engagement requirement, what happens to the individual?
States will have the flexibility to design incentive structures that they think will best promote work and community engagement. We expect that some states will choose to impose a period of ineligibility or restriction of coverage for failing to meet program requirements. States will be required to monitor and evaluate the effectiveness and impact of such programmatic elements.
How will states be required to consider individuals that live in high unemployment areas?
As many Medicaid beneficiaries live in areas of high unemployment, or are engaged as caregivers for young children or elderly family members, states should consider a variety of activities to meet the requirements for work and community engagement, including tribal employment programs, in addition to the activities identified to meet the requirements under SNAP or TANF. States should also consider whether enacting changes to work and community engagement requirements would be appropriate due to economic and environmental factors, such as high unemployment rates in certain areas.
Does the new policy require states to consider other issues that affect an individual’s ability to get a job such as transportation, child care assistance, education, etc.?
States will be required to develop strategies to assist beneficiaries in meeting work and community engagement requirements and to link individuals to additional resources for job training or other employment services, child care assistance, transportation, or other work supports to help beneficiaries prepare for work or increase their earnings. However, states will not be able to use Medicaid funding to finance these services for individual’s subject to work and community engagement requirements.
Will the costs of imposing a community engagement requirement end up costing more money?
These demonstrations will not have a negative fiscal impact as they must be "budget neutral" to the federal government. This means that, during the course of the project, federal Medicaid expenditures will not be more than federal Medicaid spending would be without the demonstration. CMS will provide technical assistance, as necessary, to assist states in calculating and demonstrating budget neutrality.
How/What mechanism is in place for states to evaluate health and other outcomes of individuals, subject to a work or community engagement requirement?
CMS is committed to ensuring state accountability for the health outcomes produced by the demonstrations, and they will be required to conduct rigorous outcomes-based evaluations.