Under H.R. 1, states must require that low-income people meet work-reporting requirements to qualify for Medicaid under the Affordable Care Act’s (ACA) Medicaid expansion. Everyone applying for or seeking to maintain coverage under the expansion must show they are participating in work or another approved activity, or that they meet a specified exemption. This requirement will affect 25 percent of current Medicaid enrollees and must be implemented by January 1, 2027, in the 40 expansion states, the District of Columbia, Wisconsin, and Georgia. About 5.3 million people are expected to lose coverage, including many who will remain eligible but have difficulty reporting. Congress identified people who are “medically frail or otherwise ha[ve] special medical needs” as one group exempt from the work requirement, but it remains unclear who will qualify for this exemption.
The Medicaid expansion under the ACA is an important source of coverage for people with disabilities. While 34 percent of Medicaid enrollees report disabilities, only 10 percent qualify for coverage because of a disability determination. Instead, most enrollees with disabilities qualify through the expansion or another pathway that bases eligibility solely on income. This is because income-based determinations are faster and less burdensome for applicants and states, compared to disability-based determinations. Similarly, only 31 percent of Supplemental Security Income applicants were determined medically eligible on initial review. Moreover, Social Security Administration (SSA) eligibility criteria often do not incorporate the most current developments in medicine or knowledge about disability. People with chronic conditions, such as diabetes, heart failure, and lung disease, often do not meet SSA’s restrictive disability definition, even though their health conditions impact their functioning.
Medical frailty has been part of Medicaid for 20 years, but processes are not well developed. Medical frailty was first incorporated into Medicaid when Congress allowed states to offer “alternative benefit plans” (ABPs). For example, New Mexico now enrolls most of its Medicaid population in ABPs, which cover some, but not all, of the services included in the state’s traditional Medicaid plan. States can design their ABP to include all the services covered in its traditional Medicaid plan. If states instead choose to offer an ABP that differs from their traditional Medicaid plan, they must exempt certain enrollees, including medically frail individuals, from ABP enrollment, which means these individuals can still get coverage under the state’s traditional Medicaid plan. Before the ACA, few states offered ABPs. When the ACA required ABPs for expansion enrollees, 12 states offered ABPs that differed from the traditional benefit package and therefore started determining medical frailty to distinguish who from the expansion population could enroll in their traditional benefit package. Some of these states also had waivers that imposed work requirements and premiums on expansion enrollees who were not medically frail.
Rates of medical frailty identified in the Medicaid population vary widely among states and are driven by policy choices. In states where the medical frailty designation held greater significance for enrollees — for example, being medically frail meant being exempt from work requirements and premiums — there were higher rates of medical frailty qualification than in states where medical frailty only determined access to the traditional benefit package. Depending on individual health needs and state benefit choices, this package may or may not be preferable to the ABP. Other factors that contribute to the variation among states in how many people are identified as medically frail include whether:
- enrollees were aware of and could easily navigate the process
- enrollees, along with health plans, treating providers, state agencies, and enrollment brokers could initiate the process to be categorized as medically frail
- multiple types of verification, including self-attestation, were accepted
- state criteria were broad or restrictive (i.e., only specific diagnoses accepted) within federal parameters.
H.R. 1’s criteria for medical frailty almost exactly parallel the ABP definition. Both definitions must at least include people who meet SSA disability criteria or have a substance use disorder, “disabling” mental disorder, “serious or complex” medical condition, or physical, intellectual or developmental disability that “significantly impairs” their ability to perform an activity of daily living.
Federal and state policy on medical frailty will be a critical part of work requirement implementation. Systems to determine medical frailty will be complex and challenging for states to implement. Most state Medicaid applications do not collect self-reported disability data, and the single streamlined application does not capture all relevant information. Most states need “entirely new [IT system] builds” to identify medically frail enrollees using claims data, with cost estimates ranging from under $10 million to over $270 million. To minimize the risk of eligible people losing coverage:
- medical frailty should be defined to encompass the full range of health conditions and functional impairments experienced by people with disabilities and chronic illnesses
- medical frailty should be redetermined only when an enrollee’s health condition improves, to minimize administrative burden and keep eligible people enrolled
- data matching should be supplemented by self and provider attestation
- individuals should not be required to show that they cannot work to qualify as medically frail
- states should explain to applicants and enrollees why health-related questions are asked and how privacy will be protected
- adequate staff should be available to meet states’ duty to assist with application and renewal processes
- states should be prepared to offer reasonable accommodations required by federal laws that prohibit disability-based discrimination.
The medical frailty determination process will allow people living with disabilities and chronic illness to be exempted from challenging work reporting requirements and stay enrolled in Medicaid. The policy choices made in this area will shape how many individuals can qualify for this designation.
