A group of five Democratic state leaders have urged the Trump administration to postpone the Jan. 1 deadline for state compliance with Medicaid work-requirement rules, saying recent changes to guidance from the Centers for Medicare & Medicaid Services have rendered timely implementation unfeasible.
Governors from Oregon, California, Maine, New Mexico and Virginia mailed a note to Health and Human Services Secretary Robert F. Kennedy Jr., voicing apprehension that unforeseen federal regulatory hurdles could cause Medicaid recipients to lose coverage.
In the correspondence they request a sensible postponement to avert unnecessary interruptions in benefits. It marks the second time Oregon Governor Tina Kotek has appealed against the work-requirement mandate, which conditions Medicaid eligibility on employment, schooling or volunteer activity.
Background on Medicaid Work Requirements
The policy, which will kick in at the start of next year, impacts about 21 million individuals who obtained Medicaid coverage via the Affordable Care Act’s expansion. In May, Governor Kotek dispatched an additional letter to HHS seeking greater leeway for rolling out the work requirements, yet the Trump administration did not reply.
Implementing the work-requirement program has proven a major obstacle for states, which were given only 18 months to overhaul data and eligibility infrastructures, broaden outreach and education, and monitor compliance, largely without substantial federal financing. Nevertheless, many states proceeded using informal guidance from federal regulators, as formal CMS guidelines were still absent.
Concerns Over Implementation
In June, CMS issued an interim final rule that offered far less flexibility than states had anticipated.
Read Also: Insurers Cut Medicare Advantage Benefits Despite Promises
“Given the scope and timing of the changes in the IFR, we do not believe states can meet the January 1, 2027 compliance date in a manner that adequately protects beneficiaries or gives states the opportunity to build and test the systems necessary for successful implementation,” the governors wrote.
The governors pointed to newly tightened criteria for medically vulnerable persons to demonstrate incapacity for work and unexpected alterations to state verification processes, among other provisions. They urged HHS to postpone the compliance deadline and “work with states to establish a realistic implementation timeline.”
The correspondence adds further strain on HHS, with over twenty-two states currently filing lawsuits against the Trump administration concerning the rule. At the same time, several Republican-controlled states are applying Medicaid work conditions that exceed the federal mandate.
Nebraska became the inaugural state to roll out work requirements in May. Initial state data already indicates that bureaucratic hurdles are causing loss of coverage.
So far, almost 560 new Medicaid applicants subject to the work-requirement rule have been denied, with almost 470 of those — or 84% — because they weren’t able to provide the information needed to verify compliance.
For individuals under the work-requirement scheme who are renewing Medicaid, about 530 people have been kicked off the program, 92% because they didn’t respond to verification compliance requests.