Colorado Medicaid Work Requirements Unfolding
Colorado Medicaid officials are currently trying to determine who may be exempt from the upcoming federal work requirement that affects around 400,000 residents in the state, and how individuals can prove those exemptions.
Last summer, a Republican bill, H.R. 1, often referred to as the “big, beautiful bill,” set its sights on low-income individuals aged 19 to 64 in states that have expanded Medicaid. This requirement kicks in starting in January.
The Colorado Department of Health Policy and Finance estimates that roughly 378,000 people need to meet these new criteria. Essentially, that means they must either work, volunteer, or attend school for at least 80 hours a month—or provide proof of qualification for an exemption.
While the department offers tools for individuals to assess whether they fall under these work requirements, details on what qualifies as an exemption related to medical conditions remain unclear.
Previous estimates from the Congressional Budget Office and various nonprofits have suggested that millions across the nation—between 3 million and 7 million—could potentially lose Medicaid coverage due to new work commitments.
The federal bill did exclude individuals deemed “medically frail,” but the specific criteria for this definition haven’t been thoroughly articulated. Some states interpret it as referring to those whose health may deteriorate if they lose their coverage, potentially encompassing a wide range of chronic illnesses. However, Colorado has yet to disclose how it plans to define medical frailty.
A new, extensive rule issued by the Centers for Medicare and Medicaid Services—almost 400 pages—aims to clarify things. The federal agency now defines medical frailty as an inability to meet work requirements, ruling out broader state definitions. So, for instance, states cannot exempt entire groups based on specific diagnoses like cancer or Parkinson’s disease.
The law also includes exemptions for individuals who are pregnant or caring for children under 14, though it remains uncertain how states will identify who qualifies as a caregiver.
Adela Flores-Brennan, director of Medicaid at the Department of Health Care Policy and Finance, explained that Colorado began its work requirement preparations promptly after the bill passed last July.
During this waiting period for further guidance, states will have to make their best guesses about the federal government’s intentions, which may not always be accurate, she cautioned.
“We are still reviewing the rules and trying to grasp their implications,” she said during a webinar on Tuesday.
While Medicaid has access to existing medical records, health providers don’t typically offer assessments regarding an individual’s work capability, which can vary. For example, someone who worked manually their entire life but now uses a wheelchair may find it much tougher to find work compared to an office worker with similar mobility challenges.
Mark Williams, a spokesperson for the Department of Health Care Policy and Finance, noted that they are still evaluating the CMS regulations and figuring out how to substantiate the ability to work.
If someone lives with a disabled individual enrolled in Medicaid, they might be able to identify that person as a caregiver, but this becomes complicated if they live separately, he mentioned.
The state plans to leverage existing data on income from various federal resources, the Colorado Department of Labor and Employment, and the credit bureau Equifax to verify compliance where feasible.
Maribel Crookman, director of the department’s eligibility division, stated that they consider individuals with a monthly income of $580 or higher as fulfilling work requirements. They are still awaiting guidance on how to validate volunteer hours.
As of 2023, about 64% of adults under 65 on Medicaid reported working at least part-time. Additionally, 29% might qualify for exemptions due to caregiving roles, disabilities, or being enrolled in school.
In Arkansas, a study indicated that 18,000 people lost their insurance due to similar work requirements, with no significant increase in employment as many individuals were unclear about the rules.
Dr. Mehmet Oz, the CMS Administrator, emphasized during a press conference that work requirements are designed to motivate individuals towards achieving their personal goals while ensuring the program remains sustainable for those in genuine need.
“I hope everyone shares the belief that we are here to change the future, to make the world a better place,” he remarked. He pointed out that many capable individuals on Medicaid might be spending an average of 6.1 hours on leisure activities, and Congress aims to reintegrate them into the workforce.
Easter Seals, a nonprofit advocating for individuals with disabilities, expressed concerns over this rule, questioning the rationale behind such a work requirement. Kendra Davenport, President and CEO, remarked that access to medical care facilitates job opportunities, rather than the reverse.
“These working conditions create penalties for those who may lose employment or face procedural errors, jeopardizing critical insurance for eligible individuals, including children and adults with disabilities, seniors, and veterans,” she added.
