Health Care Policy Update: New Medicaid Work Requirements, Preexisting Conditions at Risk, the Drug Cost Crisis

Jacob Molyneux, Senior Editor

American Journal of Nursing

Medicaid Work Requirements

Since 2010, 33 states, including a number under Republican leadership, have chosen to expand access to Medicaid coverage under the Affordable Care Act (ACA). Medicaid in these states formerly covered pregnant women, children, the elderly, and the disabled; under the expansion, it became available to working-age adults earning less than 138% of the federal poverty level. Now, however, as many as 11 states, including several that have expanded Medicaid access, are seeking or have already been granted waivers from the Department of Health and Human Services (HHS) to impose work requirements, as well as premiums, mandatory lockouts for lapses in paperwork, and other restrictions, on state Medicaid recipients.1

Critics have pointed out that the majority of those on Medicaid who are able to work are already doing so,2 and many who are not working have children to care for, other family caregiving responsibilities, or no access to jobs in their rural areas. Such a policy will also further complicate the onerous application and documentation processes for people on Medicaid, many of whom are poorly educated or have insufficient access to the Internet. The expected result of the new Medicaid policy has been called by several commentators a “winnowing” of insurance rolls. The state of Kentucky's own estimate of how many will lose coverage under the state's proposed work requirements is 95,000.3 A number of outside experts have estimated far higher losses.4

In June, a lawsuit representing 16 Kentucky Medicaid recipients sought to block the Medicaid waiver granted by HHS, which enables Kentucky to require state Medicaid recipients to document at least 80 hours of work or community volunteer work per month to retain coverage.3 And on June 29, a federal judge halted the policy as it was set to take effect on July 1 because the HHS secretary, in approving the Medicaid waiver, “never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid.”5 Republican governor Matt Bevin, tying the state's ability to fund the Medicaid expansion to timely implementation of the work requirement, responded to the court decision by stopping dental and vision coverage for those who gained coverage under the Medicaid expansion.6 The effect of the court's decision on other states’ proposed work requirements—and whether HHS will appeal the decision—remains unclear.

Renewed Threats to ACA Consumer Protections

Turning back the clock on preexisting conditions. Major reductions in the number of uninsured citizens have occurred in states that expanded access to Medicaid and received the billions in federal health care dollars that go along with the expansion. For example, in Kentucky adding 400,000 low income adults to Medicaid rolls cut the state uninsured rate in half.3 Among the states that chose not to expand Medicaid under the ACA was Texas, where the uninsured rate is 15%, well above the national state average of 9%.7 In a separate case with huge implications for access to care on a state and national level, a suit led by the Texas attorney general (AG) and joined by 19 other Republican AGs argued before a federal judge in January that the ACA's protections for those with preexisting conditions are unconstitutional.1 In broad strokes, the logic behind the suit is that, after the 2017 Republican tax bill eliminated the ACA's individual mandate penalty (starting in 2019), the mandate along with the rest of the ACA was rendered unconstitutional.

The Trump administration Justice Department has declined to defend the ACA against this legal challenge, a move that surprised many in the Republican party, given the popularity of protections for people with preexisting conditions.8 It's easy to forget that before the ACA became law in 2010, insurance companies routinely denied coverage to those with a host of chronic conditions (often defined very freely by the insurance companies), refused to renew policies for those who became sick while insured, or charged those with these conditions far higher premiums. The ACA made all this illegal.

Ending the ACA's preexisting condition protections might affect not just those buying individual insurance plans on the open market, but also the millions who have insurance obtained through employers. For example, when someone switches jobs, the new job might not be required to cover a preexisting condition, or could impose a waiting period of up to a year before covering a condition like cancer.9

‘Essential health benefits’ and association health plans. On June 19, the Labor Department issued a rule allowing small employers to band together to purchase “association health plans”—plans that won't be subject to the minimum quality requirements for plans imposed by the ACA and are expected to further destabilize ACA insurance markets.10, 11 These plans are being touted for their relative affordability and for loosening the rules for small employers. But others have called them “junk” plans. While they will still be required to cover preexisting conditions, they will be exempt from the ACA requirement that all plans provide 10 “essential health benefits,” including routine preventive care, emergency care, maternal care, mental health care, and prescription drug coverage.

The Drug Cost Crisis

Drug costs far higher than those in other countries are one factor exerting intense financial pressure on all federal health programs and insurance plans, which are increasingly shifting out-of-pocket costs to policyholders. On May 11, President Trump gave a speech addressing the problem and offered a 39-point “blueprint,” promising to “bring soaring drug prices down to earth.”12 Possible strategies mentioned in the speech included ending the drug industry's gag rule preventing pharmacists from discussing cheaper options with their customers, enabling faster approval of over-the-counter medications, and requiring manufacturers to include drug prices in TV ads. Left out of the speech, however, was allowing Medicare to negotiate the cost of drugs with manufacturers, an approach Trump advocated during his campaign for the U.S. presidency and one that is used in some form by most other industrialized countries to keep drug costs down.

#insulin4all. The three codevelopers of the first insulin, believing it was unethical to profit from a drug that would save so many lives, sold the patent to the University of Toronto in 1923 for $1 each.13 That President Trump appointed Alex Azar, a former Lilly USA president, to the crucial role of HHS secretary has not been lost on Americans concerned about startling price increases seen year to year on many essential drugs. As a November 2017 story in the Nation pointed out, between 2007 and 2017, the years Azar was at Eli Lilly, the price of its best-selling drug Humalog, a now off-patent fast-acting form of insulin released in 1996, increased from $74 to $269 a vial.14 One particularly engaged response to the drug price crisis is the #insulin4all campaign of the nonprofit organization T1International.15 The campaign, spearheaded by young people with type 1 diabetes, all of whom require injected insulin to stay alive, has successfully used patient stories to draw media attention to the skyrocketing cost of insulin in the United States. A 2016 JAMA study found that, during the 10-year period between 2002 and 2013, the cost of insulin more than tripled.16

Activists have also focused attention on the fate of those with insulin-dependent diabetes in poor countries, where the cost of insulin and other essential supplies like syringes, as well as other systemic issues, can make obtaining access to regular blood glucose testing and insulin injections a constant challenge, often leading to tragically diminished life expectancies and quality of life.15, 17

The issues of health care costs, access, and quality described here will be important to voters in November's midterm elections. But as always, these complex and rapidly developing issues are subject to partisan spin by politicians and commentators. It remains to be seen who will tell voters the most convincing story.


1. Collins SR. Two lawsuits with implications for the coverage of millions of Americans. New York, NY: To the Point [blog];The Commonwealth Fund 2018.

2. Garfield R, et al. Implications of work requirements in Medicaid: what does the data say? Washington, DC: Henry J. Kaiser Family Foundation; 2018 Jun 12. Issue brief; https://

3. Meyer H. Kentucky’s Medicaid work requirement faces reckoning in court. Modern Healthcare 2018 Jun 13.

4. Milken Institute of Public Health, George Washington University. Hundreds of thousands of Kentucky residents could lose Medicaid under the work demonstration project approved by the Trump administration. 2018 Apr 9. https://publichealth.

5. Kodjak A. Federal judge blocks Medicaid work requirements in Kentucky. NPR 2018 Jun 29. health-shots/2018/06/29/624807533/federal-judge-blocksmedicaid-work-requirements-in-kentucky.

6. Gillespie L. After court blocks Bevin’s Medicaid changes, Kentucky halts dental, vision benefits for some. 89.3 WFPL Louisville 2018 Jul 1.

7. Henry J. Kaiser Family Foundation. State health facts: health insurance coverage of the total population. 2016. https://www. =0&sortModel=%7B%22colId%22:%22Location%22,%22s ort%22:%22asc%22%7D. 8. Kodjak A, Davis S. Trump administration move imperils preexisting condition protections. NPR 2018 Jun

8. https://www.

9. Armour S. Get health coverage at work? Lawsuit against ACA could affect you, too. Wall Street Journal 2018 Jun 13.

10. U.S. Department of Labor. President Donald J. Trump helps millions of Americans employed by small businesses gain access to quality, affordable health coverage [press release]. 2018 Jun 19.

11. Hancock J, Appleby J. Administration eases way for small businesses to buy insurance in bulk. Kaiser Health News 2018 Jun 19.

12. Pear R. Trump promises lower drug prices, but drops populist solutions. New York Times 2018 May 18.

13. Rosenfeld L. Insulin: discovery and controversy. Clin Chem 2002;48(12):2270-88.

14. Elliott J. Alex Azar, Trump’s HHS pick, has already been a disaster for people with diabetes. The Nation 2017 Nov 21.

15. T1 International. T1 International: about. London; 2013.

16. Hua X, et al. Expenditures and prices of antihyperglycemic medications in the United States: 2002-2013. JAMA 2016; 315(13):1400-2.

17. World Health Organization. Global report on diabetes. Geneva, Switzerland; 2016. handle/10665/204871/9789241565257_eng.pdf.

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