Feds approve Ohio's request to implement work requirements

Lydia Coutré March 15, 2019

The federal government approved Ohio's request to impose work requirements for the Medicaid expansion population.

The CMS approved the waiver request on Friday, granting the state permission to implement the eligibility requirements.

In a tweet, CMS administrator Seema Verma wrote: "#Ohio added over 20k jobs in January. With unemployment steady under 5%, there are great opportunities to connect adults on #Medicaid w/ opportunities to improve their lives & health – so I'm pleased to send @GovMikeDeWine the 9th approval of a community engagement waiver!"

Studies have indicated that coverage loss is an inevitable outcome of the implementation of work requirements. In January, Crain's wrote about a report from the Center on Budget and Policy Priorities that concluded that Arkansas, where people have lost Medicaid coverage following the implementation of work requirements for beneficiaries, serves as a cautionary tale to other states looking to implement such eligibility requirements.

The Commonwealth Fund, a not-for-profit private foundation supporting independent healthcare research, released a study this week that found that Medicaid work requirements could contribute to a loss of revenue for hospitals across all states that implement them. The foundation estimated the total loss to be between $3.7 billion and $4.1 billion in 2019 alone.

The Commonwealth Fund analyzed 157 hospitals in Ohio and estimated a 12.5% to 13.7% drop in Medicaid revenue per hospital after the implementation of work requirements.

Implementing work requirements as a condition of Medicaid coverage could result in not only the loss of health insurance for individuals, but could also impact hospitals' revenues, increase uncompensated care costs and "have a detrimental economic effect on local communities," the report stated.

According to the Commonwealth Fund report: "In states that impose work requirements, Medicaid beneficiaries will lose health insurance coverage if they cannot find work, are unable to document the required number of hours of work activity, or cannot document an exemption. Their loss of coverage will impact hospitals by reducing revenue and increasing uncompensated care costs. These adverse effects will not only affect the hospitals and Medicaid patients, but the entire community served by these hospitals if hospitals must reduce staff or eliminate important services because of lower revenues and increased uncompensated care."

Last year, hospitals stood alongside many advocate organizations in opposing Ohio's work requirement proposal.

In a statement, Rea S. Hederman Jr., executive director of the Economic Research Center and vice president of policy at The Buckeye Institute, called the announcement of the work requirement approval "good news for Ohio and Ohioans" and an "important step in reforming the state's health care system."

"The Buckeye Institute's research shows that with these work requirements many Ohioans will see higher earnings over their lifetimes and they will gain valuable work experience by remaining connected to the workforce," he said. "With the approval of Ohio's waiver, it is now the responsibility of the state to develop a system that allows Medicaid enrollees to easily report their time working, and that ensures no one deserving of services is kicked-off the roles due to an overly cumbersome reporting process."

The Center for Community Solutions — a local nonpartisan think tank focused on health, social and economic issues — released a statement from its president and executive director, John Corlett, who is a former Medicaid director for the state of Ohio.

"According to the State of Ohio's own extensive, independently conducted research, Ohio's Medicaid program enabled hundreds of thousands of Ohioans to get and stay healthy," Corlett said. "Healthy Ohioans can keep their jobs and take care of their families without fear of choosing between their health and other necessities like food or rent. That is why we are disappointed that the federal government approved this waiver of federal law when so many operational details are missing or incomplete."

He laid out several steps that should be in place before the waiver goes into effect. For one, the state needs to determine what additional costs the waiver would impose on county government, which the center has estimated could cost the state millions.

Also, the state needs to ensure that its benefit system is capable of collecting the data necessary to administer the program, and the Ohio Department of Medicaid should provide monthly data on the number of beneficiaries who are employed and the number who lose coverage as a result of failing to comply with the new eligibility requirements, Corlett said.

"Finally, the state must monitor the impact of the waiver on the economic viability of safety net hospitals, community health centers and community mental health centers that serve a large percentage of Medicaid patients," he said. "These crucial institutions will be negatively impacted by a sudden increase in uninsured patients."

"Feds approve Ohio's request to implement work requirements" originally appeared in Crain's Cleveland Business.

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