CMS revokes Medicaid work requirements

On June 24, the Centers for Medicare & Medicaid Services (CMS) officially revoked Arizona’s Medicaid work and community engagement requirements, undoing the previous approval by the Trump administration in 2019.

The decision comes after a February 2021 letter in which CMS warned the Arizona Health Care Cost Containment System (AHCCCS) that the agency was beginning a process to determine whether or not to withdraw the approval.

The waiver amendment sought to change Medicaid eligibility by mandating work requirements. The AHCCCS Works program would have required able-bodied members, age 19 to 49, to participate in community engagement activities (such as employment, job searching, or community service) for at least 80 hours per month in order to qualify for Medicaid.


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In a letter detailing its decision to withdraw approval, CMS says the COVID-19 pandemic and its aftermath have made the community engagement requirement “infeasible.”

The COVID-19 pandemic has had a significant impact on the health of Medicaid beneficiaries. Uncertainty regarding the current crisis and the pandemic’s aftermath, and the potential impact on economic opportunities (including job skills training, work and other activities used to satisfy the community engagement requirement) and access to transportation and affordable child care, have greatly increased the risk that implementation of the community engagement requirement approved in this demonstration will result in substantial coverage loss.

CMS projects these work and community engagement requirements would have affected over 290,000 individuals and that up to 35% of those could have become ineligible for Medicaid within the first 12 months. 

The Commonwealth Fund estimated that between 76,000 and 103,000 beneficiaries could lose coverage within the first 12 months of full implementation of AHCCCS Works in Arizona, representing loss of coverage for 26–35 percent of the estimated total population of 293,000 beneficiaries who could be subject to the requirement in the state.

CMS also says implementation of the waiver would do little to improve employment or increase community engagement. 

Under Arizona’s community engagement requirement, illness, disability, full time enrollment in educational activities, and caregiving are qualifying exemptions, and educational activities less than full time are a qualifying activity.  Accordingly, these data suggest that the majority of beneficiaries who could be subject to Arizona’s community engagement requirement but were not working would have been otherwise exempt from or meeting the requirement. Thus, if implemented, there would be little margin for the program to increase work or community engagement in Arizona.