Comments on the implementation of Medicaid community engagement (work) requirements

The Centers for Medicare and Medicaid Services’ (CMS) interim final rule with comment period (IFC) interprets and implements the requirement that certain Medicaid beneficiaries demonstrate a specified level of work or other community engagement activity in order to maintain their eligibility for coverage, and estimates the rule’s impact on both enrollment and federal spending. Sherry Glied and Richard G. Frank provide CMS with comments on the Regulatory Impact Analysis (RIA) accompanying the IFC and examine the assumptions underlying CMS’s coverage-loss and federal-savings estimates, as well as key features of the rule’s exemption policy for beneficiaries with behavioral health conditions.

Their comments address five key aspects of the analysis:

1. The requirement will cause little or no increase in employment. The RIA assumes that the work requirement will lead 29% of those subject to it to begin working, but offers no empirical justification for this assumption. This assumption is inconsistent with the findings of three separate, well-developed strands of research, which all imply that the requirement will cause little or no increase in employment.
2. Achieving the IFC’s assumed budgetary impact given this coverage loss estimate would require that CMS disenroll an implausibly high number of very high-cost Medicaid beneficiaries. This is because the RIA’s unsupported assumption of substantial increases in community engagement reduces predicted coverage loss associated with the work requirement.
3. The RIA’s assertion that work makes people healthy is not grounded in credible evidence. Specifically, the RIA assumes that the increase in community engagement that is assumed to occur will generate benefits to those newly participating in community engagement activities—an assertion based on correlational evidence that cannot establish causal linkages and fails to account for the substantial causal evidence that work does not consistently or uniformly improve health.
4. The RIA fails to address the costs to beneficiaries of coverage losses. A substantial literature now exists showing quantitatively large health benefits of the specific coverage gains that the work requirement will reverse through the IFC.
5. The IFC’s exemption list fails to recognize the key features of behavioral health disorders (mental illness and substance use disorders) in the design of the exemptions.

The remainder of this comment letter examines each of these issues in turn.

Read the full letter