Legal Action Center released a report on strategies to protect Medicaid coverage for people with substance use disorder (SUD) and formerly incarcerated individuals as the budget law’s new work requirements are implemented.

The context: The budget law creates work requirements in Medicaid, with exemptions for individuals with a substance use disorder (a “medically frail” condition under the law) and individuals participating in a drug or alcohol addiction treatment and rehabilitation program.

• But: It will likely be difficult for people to get these exemptions, and many will still end up losing coverage. Implementation of the work requirements and exemptions could make a major difference in how many people lose coverage.

Maximize exemptions:

• Definitions: Policymakers should adopt the broadest possible definitions for exemptions from work requirements, including defining an individual with a substance use disorder as “an individual who had, has, or would be classified as having any substance use-related condition under the most recent edition of the DSM or ICD” — inclusive of all substances and levels of severity, even without a formal diagnosis from a medical provider.
• Categorization: Policymakers should also develop policies to categorize individuals into the longest lasting, most protective exemptions, including categorizing people participating in SUD treatment programs under the longer-term “medically frail” exemption. If the exemption for participating in treatment is used, policymakers should not impose any limitations on the time or intensity of treatment.

Minimize burdens:

• Self-attestation: The law does not require individuals to demonstrate or states to verify the exemptions. Federal policymakers should maintain this flexibility, and states should choose not to require individuals to submit any documentation or proof to verify that they meet an exemption. If verification is needed, simple, standardized template affidavits should be developed, made broadly accessible, and accepted as sufficient proof on their own.
• Data matching: To identify individuals who are exempt or complying with the work requirements, the law instructs states to prioritize data matching and not require individuals to submit more information. States should partner with community-based organizations and people with lived experience to identify sources of data matching that adequately preserve privacy.
• Frequency: States should not require demonstration of compliance more frequently than at redetermination, and individuals should only need to certify that they have no changes to their exemption.
• Automatic categorizing: States should automatically switch an individual from “participating in substance use disorder treatment” to “medically frail” when treatment concludes.

Advance policies that improve access to coverage and care:

• Screening for coverage: States should proactively screen Medicaid expansion enrollees for exemptions, other Medicaid eligibility pathways, and other coverage and benefits.
• SUD screening: States should promote universal screenings for SUD at hospitals and emergency departments, schools, and throughout the criminal legal system.
• Funding for SUD care: States should ensure sustainable funding for community-based MH/SUD treatment providers and support services, including through reimbursement rates and grant funding.
• Anti-discrimination protections in health insurance: States should improve parity enforcement to help ensure that people are not subject to greater barriers when accessing MH/SUD care, which is also important for ensuring meaningful access to the work requirement exemptions. States should also end policies that punish pregnant or parenting people who use substances. These policies could result in people losing their Medicaid via postpartum or parent eligibility pathways, which could result in total loss of coverage or becoming subject to work requirements.
• Employment/training programs: States should improve employment and training programs in Medicaid to help beneficiaries, who often face additional barriers to employment due to conviction history, meet the work requirements.