Issue: Seema Verma

The federal government granted Arizona approval to implement work requirements for some Medicaid recipients Friday.

Although the Centers for Medicare and Medicaid Services approved the state’s request to implement work requirements for “able-bodied” Medicaid recipients, the federal government did not approve Arizona’s request to add a five-year lifetime limit for state Medicaid recipients.

Arizona is eligible to implement work requirements for Medicaid recipients as soon as Jan. 1, 2020, according to the approval from CMS administrator Seema Verma. Arizona Health Care Cost Containment System officials estimate the new requirement will apply to about 120,000 of the state’s 1.8 million Medicaid recipients.

The state will provide a three-month grace period for recipients following the implementation of work requirements.

The approval from the federal government means Arizona can require people ages 19 through 49 receiving health care through AHCCCS to be working, looking for work, training for employment or going to school in order to get benefits.

Those Medicaid recipients would have to report at least 80 hours of work per month and report to the state monthly that they are meeting the requirements.

If a Medicaid recipient does not comply, the state can suspend their benefits for two months, but the recipient would be automatically re-enrolled in benefits after the suspension so long as that person meets all the other requirements to receive Medicaid benefits.

The temporary suspension is expected to incentivize Medicaid recipients to seek work and “take greater responsibility for their health and well-being,”

The 19-page letter Verma issued Friday, included a denial for Arizona’s request to limit recipients to five years of benefits over the course of their lifetimes.

As AHCCCS held public forums throughout the state in early 2017 on imposing Medicaid work requirements, public comments from organizations and individuals roundly criticized the work requirement and lifetime limit, saying they would cut thousands off from care.

Some critics also said the new requirements could confuse Medicaid recipients and add unnecessary red tape to an extremely complicated and bureaucratic process.

Other states that have imposed similar work requirements have seen dips in the number of Medicaid recipients. Nearly 17,000 Arkansans lost coverage as a result of the requirements.  

In her letter, Verma acknowledged Arizona’s Medicaid changes could lead to a loss of coverage, but said that will only happen if recipients simply choose not to comply with the new requirements. And ultimately, work requirements are designed to improve health outcomes and reduce dependency on public assistance, she wrote.

Verma, in a press release from AHCCCS, also doubled down on the Trump administration’s commitment to states implementing work requirements for Medicaid recipients.

“The Trump Administration remains committed to supporting state innovation to ensure states have the flexibility needed to provide better health outcomes for their citizens,” she said.

Gov. Doug Ducey praised the CMS’ approval in a statement Friday.

“This approval from CMS will allow Arizona to implement a community engagement requirement for able-bodied adults on AHCCCS, much like the work requirements that already exist in other state benefit programs,” Ducey said. “Employment and community engagement are proven to have a positive effect on overall health and well-being.”

The federal government received 126 comments during a public comment period on Arizona’s request for permission to implement work requirements.

CMS also approved work requirement exemptions for a laundry list of people, including:

• Pregnant women
• Former foster children up to age 26
• People diagnosed with a serious mental illness
• American Indians
• People receiving temporary or permanent long-term disability benefits
• People receiving treatment for substance-use disorder
• Full-time high school students over age 18
• Full-time college, graduate or trade school students
• Homeless individuals
• A parent or caregiver of a child under age 18
• Caregivers responsible for someone with a disability
• People with an acute mental or physical condition
• People participating in the Supplemental Nutrition Assistance Program or others programs that already implement work requirements