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Feds say Arizona can move forward on work requirement for Medicaid

Federal officials issued guidelines last week that will let Arizona and nine other states move ahead on proposals to require that able-bodied Medicaid recipients are either working or involved in “community engagement activities” to be eligible for coverage.

The guidance released by the Centers for Medicare and Medicaid Services (CMS) is not final approval of the state plans, but could clear the way for those states to start demonstration programs that are more flexible and better suit the needs of their populations, federal officials said. They also cited research that claims working or actively engaging in the community can improve overall health.

“People who participate in activities that increase their education and training are more likely to find sustainable employment, have higher earnings, a better quality of life, and, studies have shown, improved health outcomes,” CMS Administrator Seema Verma said in a release announcing the change.

But critics said the move would harm Medicaid recipients in Arizona and elsewhere, and called it little more than another attempt by the Trump administration to undermine the current health care system.

“They have no evidence of anyone taking advantage of the system, so this just becomes another obstacle for people to overcome in order to get Medicaid benefits,” said DJ Quinlan, spokesman for the Arizona Alliance for Healthcare Security.

The Arizona Health Care Cost Containment System, the state’s Medicaid agency, asked CMS last year for a waiver from Medicaid regulations that would allow it to test the work-requirement program.

AHCCCS did not return calls Thursday seeking to find out when, or in what form, the program might be implemented in Arizona. But its waiver request for the “AHCCCS Works” program said able-bodied recipients, ages 19 to 55, would have to log 20 hours a week at work or school, unless they were in one of several other exempted categories.

The guidance from the federal government said states should consider “a range of activities” to satisfy the work or community engagement requirement. Those could include job training, education, job searches, volunteering and caregiving, the guidelines said.

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The rules could apply to “working age, non-pregnant Medicaid beneficiaries” who are not disabled. But they also called on states to make allowances for areas with high unemployment or for beneficiaries who need to care for children or elderly family members, and to include strategies for linking beneficiaries to job training and referral.

The vast majority of those eligible for Medicaid benefits in Arizona would be exempt from the work and community engagement requirements, because they are disabled, a minor or elderly, said Daniel Derksen, director of the University of Arizona’s Center for Rural Health.

“The medical community is concerned that somehow they will be asked to be the ones to determine whether a person is able-bodied or not as part of assessing a patient that needs to be seen who might qualify for Medicaid,” Derksen said.

He said the group that will likely be most affected by the new requirements are childless adults.

A 2015 state law that requires AHCCCS to apply annually for a waiver to set new Medicaid eligibility requirements for able-bodied recipients simply defines “able bodied” as anyone over the age of 19 who is mentally and physically capable of working.

It is important that there be some system for those who are subject to the new requirements to report their work or community engagement status, Dersken said. But he noted that such language is not included in the new guidance, and the waiver request on the AHCCCS website makes no mention of a reporting system.

Quinlan called it a solution in search of a problem, saying Arizona’s system works well already and that lawmakers should focus their efforts elsewhere, like on “covering more people for cheaper.”

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Under the 'AHCCCS Works' plan from the Arizona Health Care Cost Containment System, able-bodied Medicaid recipients between ages 19 and 55 would have to work or be in school or job training for 20 hours a week to continue to get Medicaid coverage.