The Republican budget reconciliation package, signed into law on July 4thwill-for the first time-require some individuals enrolled in Medicaid to meet work requirements as a condition of eligibility. When implemented by January 2027 (or sooner at state option), adults enrolled through the Medicaid expansion and certain adults enrolled in Medicaid waiver programs in Wisconsin and Georgia, will be required to work or participate in work-related activity for 80 hours or more a month or attend school half time. The law exempts certain individuals from the requirements, including parents of children ages 13 and younger, people who are medically frail, and people who meet similar work requirements in the Supplemental Nutrition Assistance program (SNAP). The law also permits states to allow for short-term hardship exceptions for individuals who live in areas of high unemployment, where it may be more difficult to find a job.
This issue brief describes the hardship exception for individuals living in counties with high unemployment, and using the most recent available county-level unemployment data from the Bureau of Labor Statistics (BLS) and county-level Medicaid expansion enrollment data, estimates the number of counties that could meet the criteria for this exception and the number of expansion enrollees living in those counties who could be exempt from the work requirements. Because county-level enrollment data for enrollees who would be subject to work requirements in Georgia and Wisconsin are not available, this analysis only includes expansion states.
Based on this analysis, the scope of this hardship exception might potentially be limited; just 7% of counties meet the high unemployment criteria using a 12-month average unemployment rate and 7% of enrollees live in these counties and could be exempt if their state requests the hardship exception. However, how CMS operationalizes the criteria will effect the number of counties and enrollees that qualify. Allowing states to identify counties that meet the criteria using 6-month or 3-month average unemployment rates in addition to the 12-month average rate would increase the number of counties that qualify. Also, while the current national unemployment rate is low, changes in the economy and a tightening job market could cause unemployment rates to rise. If unemployment rates increase, the number of enrollees who would qualify for this hardship exception would also increase.
What is the High Unemployment Rate Hardship Exception?
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The law allows states to request a hardship exception for individuals who live in counties with high unemployment rates. specifically, the law permits states to request exemptions for individuals who reside in counties that have unemployment rates at or above 8% or below 8% but 1.5 or more times the national average unemployment rate.This exception is optional, but for states that request the exception and receive approval, all individuals who reside in counties that meet the criteria would be exempt from the work requirements for a specified period of time. The language in the reconciliation package is similar to the statutory language that defines a waiver exemption to the work requirements in SNAP, which permits states to request exemptions for areas that have unemployment rates over 10% or that lack a sufficient number of jobs.
The law grants the Secretary of Health and Human Services (HHS) discretion in how to implement this hardship exception, including what details states must submit. While the law lays out the broad criteria needed to meet the exception, the Secretary will have the discretion to set the parameters for how the criteria will be operationalized, including what information states must provide, the length of the exception period, and the process for applying for the exception. These decisions by the Secretary will affect ho
Medicaid Work Requirement Waivers: Geographic Concentration of Potential Exemptions
Recent analysis reveals that potential exemptions to Medicaid work requirements due to high unemployment or rural status are heavily concentrated in a small number of states. This impacts the potential reach and effect of these waivers, which aim to link Medicaid eligibility to employment or work-related activities. A significant portion of individuals who could qualify for exemptions reside in just a handful of states,limiting the broad impact of the waivers.
High Unemployment Exception & Geographic Distribution
A significant number of individuals enrolled in Medicaid expansion who reside in counties meeting high unemployment criteria could be exempt from work requirements. Data shows that nine in ten of these enrollees live in just five states (as shown in the image above).
This concentration is notably notable in Kentucky and Michigan. According to the analysis, half of the 273,350 expansion enrollees living in rural counties with qualifying unemployment rates are located in these two states. California accounts for another 14%, while Oregon (6%), Arizona (5%), Louisiana (5%), and Ohio (5%) also represent significant portions of those potentially exempt.
the impact of this hardship exception is limited overall. Only 10% of rural expansion enrollees live in qualifying counties, and in 20 expansion states, no rural counties meet the high unemployment criteria.
Total Potential Exemptions
Approximately 1.4 million people may be exempt from Medicaid work requirements through the high unemployment exception (see image above). This highlights the potential for a significant number of individuals to avoid work requirement stipulations, but the geographic concentration suggests the impact will be unevenly distributed.
Implications of Concentrated Exemptions
the geographic concentration of potential exemptions raises several important considerations:
* State-Specific Impact: States with a higher concentration of qualifying counties will likely see a smaller impact from the work requirement waivers, as a larger proportion of their expansion population will be exempt.
* Equity Concerns: The uneven distribution could exacerbate existing health disparities if individuals in states with fewer exemptions face barriers to maintaining Medicaid coverage.
* Waiver Effectiveness: The limited reach of the waivers,due to the concentration of exemptions,may call into question their overall effectiveness in promoting employment among Medicaid enrollees.
Key Takeaways
* A large proportion of Medicaid expansion enrollees potentially exempt from work requirements due to high unemployment reside in just a few states.
* Rural expansion enrollees are similarly concentrated, with Kentucky and Michigan accounting for half of those who could qualify for a hardship exception.
* The overall impact of the hardship exceptions is limited, with only 10% of rural expansion enrollees living in qualifying counties.
* The geographic concentration of exemptions raises concerns about equity and the overall effectiveness of the waivers.
This analysis underscores the importance of considering local economic conditions and demographic factors when implementing and evaluating Medicaid work requirement waivers. Further monitoring and evaluation will be crucial to assess the long-term impact of these policies on access to healthcare and employment outcomes for vulnerable populations.