CMS has announced a new initiative allowing states to propose demonstrations to “improve Medicaid enrollee health and well-being through incentivizing work and community engagement.” Specifically, states may propose Section 1115 waivers to make participation in work or other community engagement a requirement for continued Medicaid eligibility or coverage for non-elderly, non-pregnant adult Medicaid beneficiaries who are eligible for Medicaid on a basis other than disability. CMS explains the criteria it will use to evaluate state proposals, including: alignment with Temporary Assistance for Needy Families (TANF) and Supplemental Nutrition Assistance Program (SNAP) programs; population subgroups included in the demonstration (including observance of all federal civil rights laws); the proposed range of activities that would satisfy the work and community engagement requirement; the proposed beneficiary supports in meeting the new requirements; and local employment market conditions. CMS also specifies that any section 1115 waiver program must be budget neutral; states will not be permitted to accrue savings from an associated reduction in enrollment.

The day after announcing the new Medicaid option, CMS approved a Kentucky waiver allowing the state to implement a community engagement requirement as a condition of eligibility for Medicaid beneficiaries aged 19 to 64, with a number of exceptions (former foster care youth, pregnant women, primary caregiver of a dependent, beneficiaries considered medically frail, certain beneficiaries with acute medical conditions, and full time students). To remain eligible for coverage, non-exempt Medicaid recipients in Kentucky must complete 80 hours per month of community engagement activities (e.g., employment, education, job skills training, and community service).