On January 11, 2018, the Centers for Medicare and Medicaid Services (CMS) issued a State Medicaid Director Letter providing new guidance for Section 1115 waiver proposals that would impose work requirements (referred to as community engagement) in Medicaid as a condition of eligibility. As of June 2018, CMS has approved such work requirements in 4 states: Kentucky, Indiana, Arkansas and New Hampshire. A number of other states have waivers pending at CMS to impose work requirements or are considering such proposals. Not all states are interested in Medicaid work requirements, but Senate proposals and the House Budget Resolution passed by the House Budget Committee are calling for a federal requirement that all states implement work requirements in Medicaid. This analysis provides illustrative scenarios of potential nationwide reductions in Medicaid coverage if all states implemented work requirements similar to those currently proposed. The scenarios assume low and high disenrollment rates tied to compliance with the work requirements and related problems with reporting, based on disenrollment rates reported in existing studies of the effect of Medicaid reporting requirements and state estimates of enrollment under proposed waivers. Overall, among the 23.5 million non-SSI, non-dual, nonelderly Medicaid adults, disenrollment ranges from 1.4 million to 4.0 million under the scenarios considered (Figure 1). Because the majority of Medicaid adults are already working or likely exempt from work requirements, they account for a large share of people losing coverage even if they may lose coverage at a lower rate than those who are not already working but subject to work requirements. Specifically, under all scenarios, most disenrollment would be among individuals who would remain eligible but lose coverage due to new administrative burdens or red tape versus those who would lose eligibility due to not meeting new work requirements.
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