Biden officials withdraw Trump-approved Medicaid work requirements in Michigan

Beth LeBlanc
The Detroit News

President Joe Biden's administration has withdrawn approval of Michigan's Medicaid work requirements, dealing another blow to requirements that had been suspended by a federal judge last year.

The rules governing the about 900,000 beneficiaries of the Healthy Michigan Plan, the state's Medicaid expansion program, were bound to cause confusion, unnecessary benefit losses, additional administrative work for the state and more paperwork for people trying to prove compliance, said Elizabeth Richter, acting administrator for the Centers for Medicare and Medicaid. 

The COVID-19 pandemic and historic job losses that accompanied it make people more at risk for losing benefits at a time when they need them most, Richter said in a Monday letter to the state.

Michigan's website warns Medicaid recipients of work requirement changes for some participants. The Biden administration has revoked the Trump administration's approval of Michigan's work requirements for Medicaid recipients.

"CMS believes that the potential for coverage loss among Medicaid beneficiaries — especially from a requirement that is difficult for beneficiaries to understand and administratively complex for states to implement — would be particularly harmful in the aftermath of the pandemic, and makes the community engagement requirement impracticable," Richter wrote.

The state has 30 days to appeal the decision but it appears unlikely since Gov. Gretchen Whitmer opposed the work requirement and wanted them suspended. CMS notified the state of the possibility the Medicaid work requirement approval could be withdrawn and gave Michigan 30 days to object, but the state offered no additional information, Richter said. 

The policy was signed into law under Whitmer's Republican predecessor Gov. Rick Snyder.

Whitmer on Wednesday applauded the Biden administration's decision calling it "life-changing news" for thousands of Michigan residents. 

“No one deserves to be kicked off their health insurance when they need it most, especially in the midst of a global pandemic and historic recession," the Democratic governor said in a statement. 

Senate Majority Leader Mike Shirkey's office expressed hope for more changes that would encourage work and discourage dependence on the government. 

"Sen. Shirkey hopes today's move by the Biden Administration signals an interest in working to remove or soften benefit cliffs in the welfare system that discourage individual career advancement and hurt our ability to build and grow our workforce take care of our families," said Abby Walls, a spokeswoman for Shirkey, R-Clarklake.

In late 2018, under the administration of Republican former President Donald Trump, CMS approved an amendment to its Medicaid agreement with Michigan that would require most able-bodied Medicaid recipients, ages 19-62, to complete and report 80 hours per month of work or "community engagement" activities such as job training, job search efforts, substance use disorder treatment or community service.

People who did not comply with the requirements for three months out of one year would lose their Medicaid health coverage d at the end of the fourth month for at least one month.

Disabled residents, pregnant women, full-time students, children and one parent in a household with a child under the age of 6 years were exempt from the work requirements.

The program was to be implemented Jan. 1, 2020, but on March 4, 2020, a U.S. district judge vacated the approval after the Michigan Department of Health and Human Services had spent more than $30 million to implement the requirements. 

The March 4 order came as the department planned to send notices to more than 80,000 Michigan residents who failed to meet requirements in January. 

Not only would the program have resulted in unnecessary benefit losses, it also would have had little influence on job outcomes, said Richter, citing the experience of other states that implemented similar requirements. 

A Kaiser Family Foundation study, Richter said, found 62% of Michigan Medicaid recipients between the ages of 19 and 64 and without supplemental security income were working and, of those not working, 34% said they had had an illness or disability. About 76% of people with Medicaid coverage lived in a family with a working adult, according to the study. 

The report serves as an indication that "nearly everyone who was targeted by the community engagement requirement in Michigan already met the requirement or was exempt from it, so there was little margin for the program to increase work or community engagement among beneficiaries," Richter said.