Medicaid Work Requirement Bill Sent to Governor

This month, a controversial bill that would impose work requirements on Medicaid recipients in the state’s expanded Healthy Michigan Plan made its way through the Legislature. It is expected that Governor Snyder will sign this bill into law, which could affect hundreds of thousands of individuals enrolled in the Healthy Michigan Plan. The House Fiscal Agency estimates that 540,000 of 670,000 individuals in the Healthy Michigan Plan would be subject to the new work requirements, and 5-10% of those individuals could lose coverage.

As background, the Healthy Michigan Plan was approved by the Legislature in 2013. It provides health coverage to individuals between ages 19 and 64 with income at or below 133% of the federal poverty line that do not qualify for Medicare or other Medicaid programs.

Under the proposed bill, beginning in 2020, able-bodied adults ages 18 to 62 would have to show workforce engagement averaging 80 hours per month to be eligible for the Healthy Michigan Plan, unless an exemption applies. Qualifying work activities include employment or self-employment, education, job training, vocational training, internships, participation in substance abuse treatment, and community service. An individual is exempt from the workforce engagement requirements in the following circumstances: pregnant; receiving disability benefits; full-time student; medically frail; the caretaker of a family member under six years old, of a dependent with a disability who needed full-time care, or of an incapacitated individual; a recipient who met a good cause temporary exemption; a recipient with a medical condition that resulted in a work limitation; a recipient who had been incarcerated within the last six months; a recipient of unemployment benefits; or a recipient under 21 years old who had previously been in foster care.

The bill proposes that the Michigan Department of Health and Human Services (“MDHHS”) implement and enforce the new work requirements. MDHHS will be required to notify able-bodied adults 90-days in advance of the implementation of the work requirements. An individual is permitted 3 months of noncompliance in a 12-month period. However, an individual found to have misrepresented his or her compliance will be ineligible for the Healthy Michigan Plan for one year.

Because the bill would change the eligibility requirements for the Healthy Michigan Plan, Michigan will be required to seek federal approval of the work requirements. If the federal government fails to approve the waiver within 12 months or denies it, the Healthy Michigan Plan will be terminated, leaving hundreds of thousands of people without health coverage. However, denial of the waiver seems unlikely under the current federal administration, which has approved 20-hour per week work requirements in four states – Kentucky, Indiana, Arkansas, and New Hampshire. Seven other states have submitted waivers that are pending approval.

Currently, there is a legal battle heating up in Kentucky over Medicaid work requirements. In January, Kentucky residents filed a class action lawsuit against the United States Department of Health and Human Services (“HHS”) claiming that HHS exceeded its authority under federal Medicaid law when it approved Kentucky’s work requirements and that these requirements reduce access to healthcare for low income people. That case will be heard by a federal court in Washington, D.C. In February, Kentucky Governor Matthew Bevin filed a counter lawsuit in federal court in Kentucky seeking to uphold the waiver. If the two courts reach different decisions on the legality of the work requirements, it could delay implementation of the waiver requirements in Kentucky.

Therefore, even if Governor Snyder signs the Medicaid work requirements bill into law, the future of these requirements is far from certain.

For additional information, contact Wachler & Associates, P.C., at 248-544-0888.