Trump Administration’s Plan B for Evidence-based Welfare Reform? Medicaid Waivers

Just days after a weekend retreat at Camp David, where President Trump and the Republican congressional leadership agreed to set aside House Speaker Paul Ryan’s ideas for welfare reform, a Plan B appears to be emerging.

The goal?  Encourage more states to adopt work requirements, a longtime Republican objective.  The principal strategy?  Medicaid waivers, a tool intended to build the evidence base of what works.

Medicaid is the largest source of welfare-related spending for the nation’s poor, dwarfing similar federal programs like TANF. Total Medicaid spending exceeds $500 billion per year. It provides health insurance to more than one in five Americans.

In a letter sent today to state Medicaid directors, CMS said that states could pursue work requirements for Medicaid recipients using Section 1115 waiver authority.  Such waivers are intended to support experiments, pilots, and demonstration projects of various kinds under Medicaid and CHIP.  They must be budget-neutral and include evaluations.

Such waivers are intended to build out the evidence base. It is unclear what evidence-based strategies the states might use to promote work by Medicaid recipients.

At least 34 states are currently using the waivers for various other purposes, including expanding coverage and modifying provider payments. They are usually focused on controlling health care costs while improving access and quality. Several states have used them to implement their Medicaid expansions under the Affordable Care Act.

The Obama administration consistently rejected state requests to use them for work requirements, according to the Washington Post. That policy has now been reversed by the Trump administration.

In its letter to state Medicaid directors, the administration said it would also support state efforts to align SNAP or TANF work-related requirements with the Medicaid  program.

The change could have an immediate impact. According to the New York Times, at least 10 states have expressed interest in using them for work requirements: Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, North Carolina, Utah and Wisconsin.

CMS could approve the first waiver for Kentucky as soon as Friday.

“This is going to go to court the minute the first approval comes out,” Matt Salo, executive director of the National Association of Medicaid Directors, told the Post.

Earlier this week, President Trump had indicated during a press event at Camp David that he wanted to work on a bipartisan basis with Democrats on welfare reform. The new policy seems contrary to those sentiments, but it may also increase pressure on both sides to take up the issue this year.

Previous bipartisan welfare reform efforts had included significant evidence-based provisions, including consideration of a possible welfare-focused evidence clearinghouse.


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