Wisconsin is preparing to recast its Medicaid program in ways that no state has ever done, requiring low-income adults to undergo drug screening to qualify for health coverage and setting time limits on assistance unless they work or train for a job.
The approach places BadgerCare, as the Wisconsin version of Medicaid is known, at the forefront of a movement by Republican governors and legislatures that is injecting a brand of moralism and individual responsibility into the nation’s largest source of public health insurance.
From Maine to Arizona, some states are seizing on an invitation by the Trump administration to redesign a program that was created as part of the 1960s Great Society and now covers 69 million Americans. Although President Trump and his advisers talk of tailor-made innovation to match need, the states’ strategies draw on a similar repertoire — monthly premiums for people below the poverty line, time limits for coverage and fees for emergency room visits, among others. All are influenced by more conservative values that long ago filtered into welfare and other anti-poverty programs.
“The philosophy is: We want to move people up the economic ladder,” Arkansas Gov. Asa Hutchinson said.
None of the proposals, which must be approved by federal health officials, explicitly says the goal is tossing people off the rolls. Yet the proposals would significantly raise the bar for low-income people to get and stay on Medicaid. And they are surfacing at the same time that House Republicans want to reduce Medicaid funding by $834 billion over the next decade. The White House wants to reduce it even more.
The direction in which some red states want to shift their programs is highly controversial, even among some conservatives. Robert Rector, a senior research fellow at the Heritage Foundation who focuses on poverty issues and thinks that aid to the poor should not be a one-way handout, nonetheless said that requiring work makes less sense for Medicaid than for food stamps, welfare or public housing programs.
Penalizing people who don’t comply is problematic, Rector said. “You really can’t deny medical care to a sick person.” Morally and logistically, he added, “there is no feasible way to do that.”
The proposal that Wisconsin expects to submit Friday to the Department of Health and Human Services, as well as one being finalized by Maine, are especially notable because neither state expanded Medicaid under the Affordable Care Act. As a result, their redesigns would affect extremely poor people, imposing requirements that expansion states such as Arizona unsuccessfully sought for people with slightly more income.
Two governors said in interviews that they are confident the Trump administration will permit them to make changes to Medicaid the Obama administration consistently rejected — including hinging benefits to people working or training for a job. In March, HHS Secretary Tom Price and Seema Verma, administrator of the agency’s Centers for Medicare and Medicaid Services, sent a letter to the nation’s governors that declared: “We wish to empower all states to advance the next wave of innovative solutions to Medicaid’s challenges.”
Hutchinson said he has discussed his state’s imminent proposal with Price and found him “very favorable and supportive of this.” This request for a “waiver” from the usual rules will renew the state’s attempt to compel able-bodied adults who are not raising children to seek work.
And Wisconsin Gov. Scott Walker said he has talked about changing BadgerCare “multiple times” with Price, as well as with Vice President Pence. Although Walker said he did not ask for commitments to specific elements, “I feel particularly confident . . . they want to empower states to make these changes.”
Walker holds an influential role as chairman of the Republican Governors Association, and conservative and liberal health policy experts alike predict that additional states will follow Wisconsin’s example if the Trump administration approves its direction.
Several states already are on that path. In Indiana, the Medicaid program that Verma designed as a health-care consultant there is seeking a renewal of its existing waiver, and two sources said officials are likely to amend that from encouraging work or job training — the most that the Obama White House would allow — to requiring employment.
And Arizona is preparing to again seek a five-year limit on Medicaid benefits, as well as a work requirement and monthly premiums for people below the poverty line. During Obama’s tenure, CMS rejected each request last September, ruling that they “could undermine access to care.” An Arizona law requires the state to keep asking for approval.
The earliest state to win federal permission to compel work in Medicaid could be Kentucky, where Republican Gov. Matt Bevin won his 2015 campaign in part by pledging to end the Medicaid expansion there. Last August, the state sent a waiver request to allow it to charge a small monthly insurance premium for people below the federal poverty line — as Wisconsin and Maine now want to do. Kentucky would remove people from Medicaid for six months if they were 60 days delinquent in paying. The Obama administration did not finish reviewing the proposal, so it will be decided by Trump’s appointees.
The value of these new twists on poor people’s insurance is a matter of vehement debate.
“The ACA guarantees to every American citizen that there is an offer of affordable coverage,” said Eliot Fishman, who ran the part of CMS that considered Medicaid waiver requests during the Obama administration. “To create an exception to that, as a way to penalize some socially undesirable behavior in some way, is to undermine that principle.”
Fishman, now the senior director of health policy at Families USA, a liberal consumer health lobby, predicts lawsuits if CMS lets states move ahead with their plans. The question will be whether the changes are legal because Medicaid waivers must still fulfill the program’s central goal of helping the poor get access to health insurance, he said.
But Tarren Bragdon, president and chief executive of the conservative Foundation for Government Accountability, said it is important “to think of Medicaid as not just a health-care program but also a welfare program. I think that’s where you see a lot of emphasis of work requirements within Medicaid.”
Both Hutchinson in Arkansas and Walker in Wisconsin said in interviews that the changes they are attempting would not prevent some people from getting insurance but help them to become employed and self-reliant.
“We should treat public assistance more like a trampoline than a hammock,” Walker said.
Charging $1 in monthly premiums to people with incomes as low as 20 percent of the federal poverty line would prepare them for the kind of insurance they would get through a job, he said. This and the other elements of Wisconsin’s plan would apply to the 150,000 childless adult residents with incomes at the poverty level or lower.
Wisconsin also would limit people to 48 months on Medicaid, with exceptions for months in which they are working or in job training. Its first-in-the-nation drug screening would make people answer a questionnaire and, if warranted based on their answers, take a drug test. If positive, they would have to go into treatment — which in Wisconsin, as in many states, is in short supply. Those who refused the screening or treatment would be denied Medicaid, but those on a waiting list for treatment could still get benefits.
“This is not meant as a punitive measure,” Walker said, pointing out that many employers require drug tests of new hires.
Two states that have tried to mandate broad-based drug screening for welfare applicants, Florida and Michigan, faced lawsuits and court rulings that held that the requirement was unconstitutional.
The idea of denying Medicaid to people who refuse drug screening “treats addiction as a moral failing,” said Jon Peacock, research director of the Wisconsin Council on Children and Families. Besides, he said, “Republicans have railed against the Affordable Care Act by arguing incorrectly the government was coming between people and their doctors. And that’s exactly what Wisconsin is doing here.”