What Trump’s New Medicaid Rules Mean for Patients

medicaid rules

Democrats and patient advocacy groups across the country are gearing up for a fight.

The Trump administration recently ushered in a host of dramatic changes to the country's Medicaid program. States now have the ability to demand that recipients work a certain number of hours to qualify for the coverage.

The new Medicaid rules have left people reeling. For the first time in the 50-year old program's history, eligibility can be tied to something other than income. Millions of Americans will be affected.

"Our focus has shifted from getting people coverage to making sure they keep it," Bill Wagner, chief executive director of Kentucky's Family Health Centers, said. Let's review more.

The Trump Administration's Medicaid Rules

The Centers for Medicaid and Medicare Services (CMS) in January endowed states with the right to impose work and community service requirements on Medicaid recipients.

The administration wants to encourage non-disabled adults seeking government coverage to commit to finding employment.

Interested states must first request a Section 1115 waiver, a provision built into the Social Security Act that allows the health department to approve experimental Medicaid projects.

10 states have requested waivers so far.

Huge swaths of the Medicaid population are exempt from the new Medicaid rules. These include:

The government also recommends that states give leniency to people battling substance abuse problems or who are determined to be "medically frail."

The health department supports a broad interpretation of what constitutes work. Under the government's proposed guidelines, a Medicaid recipient can satisfy the work requirement if they:

  • Have a job
  • Look for a job
  • Enroll in a job training program
  • Commit to regular volunteer work.

"We have a labor force participation problem in the U.S.," Robert Doar, a fellow at the American Enterprise Institute, said.

"Not working is not in their best interest, not for their health or family or their poverty status, it leads them to be more likely to be poor. So why can't programs that provide important kinds of care do more than one thing at a time?"

How Are the New Medicaid Rules Being Implemented?

Nearly a dozen states have requested waivers to revise their Medicaid programs. A few states have gone far beyond what the federal government first envisioned.


This year Kentucky formally implemented a plan called Kentucky HEALTH. The new system requires adult Medicaid recipients to work at least 20 hours a week at a traditional job or commit the same number of hours to volunteer work.

Kentucky Medicaid recipients are also required to pay a monthly premium ranging from $1 to $15. If they miss payments, they'll be dropped from the program. Residents who are kicked out of Kentucky's Medicaid program are forced to wait six months before they can re-enroll.

Patients must re-enroll every year to maintain coverage.

Kentucky HEALTH faces multiple legal challenges.


In February, the Trump administration granted permission for Indiana's legislators to introduce Medicaid work requirements.

Health and Human Services Secretary Alex Azar told reporters that the state's plan would help lift Medicaid enrollees out of poverty.

"There is a robust body of academic evidence to show that work is a key component of well-being," he said. "This in particular is going to help open new opportunities for a lot of Hoosiers."

The Indiana plan requires most adults to hold down a job to qualify for Medicaid coverage.

Patients who don't satisfy the work requirement will be kicked out of the program. They can re-enroll after they comply with the state's demands for at least a month.

Critics fear that low-income patients will suffer.

The Trump administration argues that people will are happier and healthier when they're working.

The New Medicaid Rules Are Being Challenged In Court

Patients who disagree with the Trump administration's changes to the Medicaid program still have options.

A flurry of lawsuits were filed the moment Kentucky and Indiana imposed work requirements for Medicaid recipients. Plaintiffs argue that the new provisions are at odds with the goals of Medicaid.

In January, multiple leading activist organizations and health groups filed a lawsuit against the health department on behalf of 15 Kentucky Medicaid recipients.

The health groups argue that the patients are at risk of losing their coverage. Over 100,000 Kentucky residents are potentially affected by the new policy.

The suit claims that "authorization of work and community engagement requirements is categorically outside the scope of the... Section 1115 waiver authority."

If the lawsuit is successful, Kentucky's Medicaid work requirements will be purged.

To protect the state's new Medicaid rules, Kentucky Gov. Matt Bevin signed an executive order that will spring into effect if the plaintiffs win their suit.

If the courts bat down Kentucky's Medicaid waiver, the governor will roll-back the Medicaid expansions authorized by the Affordable Care Act.

Under the Obama-era health care law, the federal government bribes states into expanding Medicaid by offering extra funds.

What Happens Next?

Medicaid patients in states run by Democrats shouldn't notice a difference in their coverage. President Trump's new guidelines give states permission to implement work requirements for Medicaid recipients, but it doesn't force them to do anything.

At least 10 states, however, have already submitted waivers trying to take advantage of the administration's new rules. Patients residing in those states may lose their coverage if they don't either get a job or start seriously looking for one.

Patients who can't commit to a regular job can satisfy the work requirement by doing volunteer work or demonstrating that they're taking care of a relative.

The health department believes that the new Medicaid rules shouldn't apply to patients who are:

  • Pregnant
  • Elderly
  • Caring for a relative
  • Medically Frail
  • Suffering from substance abuse problems.

The Trump administration said that the new policy would help Medicaid recipients achieve the "American dream." Work requirements, the administration believes, help lift people out of poverty.

Patients often need help navigating their Medicaid options. Busy hospitals and health care organizations need to ensure that they have a reliable way of determining a patient's Medicaid eligibility.

Organizations should work with a firm that specializes in insurance requirements. Contact us today for more information.

Pete Ash

Pete is the Vice President of Sales & Client Services at DECO Recovery Management. He covers the Mid Atlantic region and specializes in Medicaid related topics. It is DECO’s Mission to maximize reimbursement to our clients by leveraging innovative technology, processes and compassionate advocates to provide exemplary service.

Categories: Medicaid

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