You’ve heard a lot from us about Oklahoma’s proposal to cut Medicaid coverage for people who don’t meet a work reporting requirement. Now, the state’s efforts have entered a new phase. Here’s what’s happened so far and what to expect going forward.
Governor Fallin and Legislature spearheaded the effort in Oklahoma
Before 2018, federal regulators had not allowed any state to make Medicaid coverage contingent on meeting a work requirement. Most people on Medicaid who can work already do work, and those who don’t work have good reasons for not working. However, reversing decades of precedent, the Trump administration is encouraging states to submit proposals to cut coverage for Medicaid enrollees who don’t meet a work reporting requirement.
The 2018 Oklahoma legislative session opened with four work requirements bills. One, HB 2932, passed through both chambers and was signed into law. That spring, Gov. Fallin also signed an Executive Order instructing the Oklahoma Health Care Authority (OHCA), the state’s Medicaid agency, to begin building a plan to be submitted for federal approval.
Oklahomans came out against the proposal during two comment periods
So far, Oklahoma’s plan to cut coverage for parents who don’t meet a work reporting requirement has been through two rounds of public comments. Public comment periods serve a number of purposes – they show the public what the agency is planning to do, give the public an opportunity to respond, and help establish an administrative record. Both the state Medicaid agency and federal regulators have held comment periods for the state’s proposal.
The Oklahoma Health Care Authority (OHCA) posted the plan for a 90-day public comment period on July 3, 2018 (the public comment period was initially scheduled for 60 days, but following significant public engagement, OHCA extended the comment period by another 30 days). During this time, OHCA received more than 1,200 public comments, with just 23 in favor of the proposal. OHCA also says it held 30 “public and targeted forums” around the state for input. After the state public comment period concluded in late September, OHCA made minor revisions to the proposal and sent it to federal regulators at the Centers for Medicare and Medicaid Services (CMS) on December 7th.
Having received the OHCA proposal, CMS posted it for another, shorter public comment period on December 20. Before that comment period concluded, CMS had received some 900 comments. As with the state-level public comments, the majority of comments were negative, with commenters alternately urging the state to withdraw the proposal and the federal government to reject it.
The ball is in the federal government’s court(s)
With the second comment period concluded, what happens next is up to federal regulators. There’s no time limit for CMS to respond to the proposal, and CMS historically doesn’t respond quickly. Even with regards to proposals to cut coverage for parents who don’t meet a work reporting requirement – a policy CMS has encouraged states to implement – no state yet has received an approval within six months. Some have waited much longer: CMS took 15 months to approve a proposal from Maine, which Maine’s new governor has since withdrawn, and Utah’s proposal had been pending for 14 months before the state withdrew it (Utah has a new proposal pending with CMS).
There are other unknowns as well. So far, CMS has approved proposals to cut Medicaid for adults who don’t meet a work reporting requirement in eight states. All of those states but one have expanded Medicaid under the Affordable Care Act – and while the outlier, Wisconsin, isn’t technically an expansion state, it does have an abnormally robust Medicaid program that provides coverage to many adults who are uninsured in other nonexpansion states. In short, it’s not clear what CMS plans to do with nonexpansion states like Oklahoma, where childless adults and many parents aren’t currently Medicaid-eligible, and where income eligibility thresholds are so low that requiring 80 hours of work per month forces parents into a catch-22. This is because members who don’t report enough work may have coverage terminated for noncompliance, while members who do meet the requirement risk out-earning Oklahoma’s Medicaid income eligibility threshold and lose their Medicaid anyway, with few other affordable coverage options.
Furthermore, federal approval isn’t the end of the road.
It’s also possible that what the federal government would approve wouldn’t be what the state submitted. After the federal public comment period, federal regulators with CMS and the state will negotiate the specifics of the proposal in an effort to reach an agreement. The proposal can change a fair amount during that process. Furthermore, federal approval isn’t the end of the road. With federal approval, states then need to create the rules and systems to operate it.
Now, of the eight states with approved plans to cut coverage for adults who don’t meet the reporting requirement, we only have implementation data from one. In Arkansas, more than 18,000 members’ health coverage has been terminated after implementation, and Legal Aid, the National Health Law Program and the Southern Poverty Law Center have filed suit on behalf of these individuals. Indiana’s work requirement technically took effect this January, but members don’t have to begin complying until this summer, and members won’t be terminated over failure to meet the requirement until 2020. And while Kentucky was the first state to have a Medicaid work requirement approved, lawsuits have so far prevented the states’ plan from going into effect.
The possibility of coverage expansion complicates the situation – but not by much
For the first time, Oklahoma legislators are seriously contemplating following in 37 other states’ footsteps and expanding access to health coverage as authorized by the Affordable Care Act. This should bring needed access to health care to more than 100,000 Oklahomans, most of whom are childless adults earning at or below the poverty level (up to about $12,500 for a single adult), and parents who out-earn the state’s current, very low income eligibility threshold (between about $7,800 and $16,900 for a single parent with one child).
It’s likely that any plan lawmakers would make to expand access to care would include cutting coverage for members of the expansion population who don’t meet a work reporting requirement. If that’s the case, Oklahoma should withdraw its current proposal, which would affect only very low-income parents (the eligibility threshold currently cuts off at about $7,800 per year for a single parent with one child). Some states (Arizona, New Hampshire and Ohio) have specifically exempted from the work requirement individuals who were eligible for Medicaid prior to expansion, typically low-income parents. Going further, Arkansas has exempted adults in a household with a child under age 18. This makes sense: while work requirements are generally bad policy, they’re especially bad for parents. Cutting coverage for parents who don’t meet a requirement will hurt both parents and their children.
The bottom line
With so many moving pieces, the future of Oklahoma’s proposal to cut coverage for parents who don’t meet a work requirement is fuzzy at best.
With so many moving pieces, the future of Oklahoma’s proposal to cut coverage for parents who don’t meet a work requirement is fuzzy at best. The regulators at CMS don’t make decisions quickly, and it’s unclear whether the federal government will even approve a proposal for a non-expansion state like Oklahoma. What CMS approves may not be what the state submitted, and even if approval is granted, the state then has to design the process to run the program. After that, litigation could create further delays. And that’s without getting into the possible roadblocks thrown up by congressional Democrats newly emboldened from their midterm victory. In short, whatever comes next for work requirements is likely to operate according to a timeline that stretches over months if not years.