On Thursday, December 12, 2019, the Trump administration announced its approval of South Carolina’s request to condition Medicaid eligibility on work or community engagement activities. In a joint statement released on Thursday by CMS Administrator Seema Verma and South Carolina Governor Henry McMaster, Governor McMaster stated that “[i]n this economy, there is no excuse for the able-bodied not to be working.” South Carolina is the first non-expansion state to receive an approval to implement work and community engagement requirements.
The U.S. Court of Appeals for the D.C. Circuit is soon expected to issue a ruling in Stewart v. Azar (Case No. 19-5095) on whether approval of the Kentucky and Arkansas work and community engagement requirements were arbitrary and capricious. (Health Law Pulse summary here) Judge James E. Boasberg of the Federal District Court for the District of Columbia previously struck down work requirements in Arkansas, Kentucky, and New Hampshire. The Arkansas work requirement led to loss of coverage for more than 18,000 people before the requirement was blocked by Judge Boasberg in March. More recently, Arizona, Indiana, Michigan, Ohio, Utah, and Wisconsin have voluntarily halted implementation of their work requirements. Challenges to the Indiana and Michigan demonstration approvals have been filed.
South Carolina’s section 1115 demonstration will require “able-bodied” adults to engage in and report 80 hours a month of work or time spent searching for a job, taking classes, and volunteering as a condition to remain eligible for Medicaid coverage. Adult Medicaid enrollees, including parents of minor children, must meet this requirement unless they are eligible to receive an exemption.
In its approval letter, CMS stated the demonstration would enable CMS to evaluate whether the work and community engagement requirement would improve health and financial independence and reduce healthcare costs. Notably, the approval does not provide an estimate of the loss of coverage due to the work requirement. Judge Boasberg has highlighted the failure of CMS to consider coverage losses in his earlier rulings. For instance, in his ruling vacating the approval of New Hampshire’s efforts to impose work requirements Judge Boasberg stated that:
The agency has still not contended with the possibility that the project would cause a substantial number of person to lose their health-care coverage. That omission is particularly startling in light of information before the Secretary about the initial effects of Arkansas’ markedly similar project. Philbrick v. Azar, 397 F. Supp. 3d 11, 15 (D.D.C. 2019).
CMS declined to approve the request to expand coverage under the Children’s Health Insurance Program (CHIP) to women and children in households with income up to 241% of the federal poverty level.
Notably, South Carolina’s section 1115 waiver includes expansion of eligibility, likely in an attempt to draw a contrast with earlier CMS approvals and demonstrate that this program promotes the objectives of the Medicaid program. South Carolina will increase the eligibility threshold for parents of minor children and other caretakers from 67% to 100% of the federal poverty level. It would provide for similar expansions to adults with household income below 100% of the federal poverty level who are chronically homeless, require substance abuse treatment, or are in the criminal justice system.
A joint letter from the Georgetown University Center for Children and Families, the American Academy of Pediatrics and other groups stated the waiver “does nothing to help parents living in or near poverty… but instead adds red tape burdens that will fall squarely on the parents’ shoulders.”
*Special thanks to Rachel Park, Law Clerk and District of Columbia Bar license pending, for her assistance in preparing this post.
 Rose v. Azar, 1:19cv2848; Young v. Azar, 1:19cv3526.