In 2018, CMS debuted a new policy that allowed states to test work requirements. Soon after, the agency began approving the demonstrations for states. As of July, CMS had approved demonstrations from nine states seeking to test work requirements.
However, GAO found CMS doesn’t consider the cost to administer work requirements when approving the demonstrations, much of which is covered by federal funding. While the demonstrations aren’t supposed to increase Medicaid funding, when the GAO looked at the first five states that received CMS approval for work requirements — Kentucky, Wisconsin, Indiana, Arkansas and New Hampshire — the office found taxpayers were paying millions if not hundreds of millions to implement the requirements.
Medicaid work requirements cost Kentucky taxpayers the most at an estimated $271.6 million. Next was Wisconsin at $69.4 million; Indiana at $35.1 million; Arkansas at $26.1 million; and New Hampshire at $6.1 million.
CMS did not concur with the GAO’s recommendation that administrative costs associated with Medicaid work requirements should be required in demonstration proposals.
Read the full report here.
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