Why Being Disabled Isn't Always Enough to Get a Work Requirements Exemption
The bottom line: Under the new Medicaid work requirements, some people who are clearly disabled may still have to prove they cannot comply. The rule creates exemptions or exclusions for a long list of people, but for parents, caregivers, and people with disabilities, the exemption exists on paper more easily than it will in practice.
In our last newsletter, we covered who has to comply with the new community engagement requirements and what activities count toward them. This newsletter focuses on who does not have to comply, and what it may take to prove it.
We find it helpful to think about this in three buckets.
Bucket 1: No Action Required
This group does not have to worry about the requirements at all. It includes children and youth under age 19, people over age 64, and anyone living in the seven states that are not required to implement the program: Alabama, Florida, Kansas, Mississippi, South Carolina, Texas, and Wyoming.
Bucket 2: Exempt by Statute, but May Need to Show Documentation
This group is exempt under the law, but individuals may still need to provide documentation to their state. The exemptions here are relatively clear cut once a person has the right paperwork. They include people who are:
Enrolled in Medicare, or entitled to enroll in Medicare
Veterans with a "total" disability rating from the Veterans Administration
Currently incarcerated, or released within the last three months
Pregnant, or enrolled in Medicaid postpartum coverage
Youth who have aged out of foster care and are under age 26
American Indians, or anyone else who receives services from the Indian Health Service
Compliant with the Temporary Aid for Needy Families work requirement
Receiving SNAP benefits and not already exempt from the SNAP work requirement
Participating in a drug or alcohol rehabilitation program
Bucket 3: Excluded in Principle, but Will Have to Work for It
This is where it gets complicated. Two groups are excluded under the statute but may not have easy documentation to prove it: parents and caregivers, and people considered medically frail due to disability or other health concerns.
Parents and Caregivers
To qualify for this exclusion, both the caregiver and the person being cared for have to meet specific definitions. Caregivers can include parents, guardians, caretaker relatives, and family caregivers, and multiple people in the same household can each qualify. The key question in each case is whether the person provides regular, substantive care to a child under age 14 or a disabled person of any age. Non-relatives who do not live with the person they care for need to show at least 80 hours of assistance per month to qualify, though any hours below that threshold can still count toward the monthly work requirement.
It is also worth noting that CMS narrowed the family caregiver definition from what Congress wrote in the statute. The original language drew from the RAISE Family Caregivers Act and covered people caring for anyone with "a chronic or other health condition, disability, or functional limitation." CMS replaced that with "a dependent child or disabled individual," which is more restrictive and may exclude some caregivers who would otherwise qualify.
For the care recipient, CMS uses the Americans with Disabilities Act definition of disability: a physical or mental impairment that substantially limits one or more major life activities. This is a broad definition that covers physical actions, cognitive functions, and the operation of major bodily functions.
People Who Are Medically Frail or Have Special Medical Needs
The conditions that can qualify someone for this exclusion are fairly broad and include being blind or disabled under the SSI or SSDI definition, having a substance use disorder (unless in recovery for five or more years), having a disabling mental disorder, having a physical, intellectual, or developmental disability that significantly impairs the ability to perform one or more activities of daily living, or having a serious or complex medical condition.
However, CMS added a requirement that does not appear anywhere in the statute: individuals must not only have one of these conditions, they must also show that the condition "significantly impairs the individual's ability to comply with the community engagement standards" (at section 435.554(c)(5)(i)). No other exclusion or exemption carries this additional burden.
States are required to develop a list of qualifying diagnoses along with a process for someone to request an exclusion even if their condition is not on the list, but CMS offers very little guidance on how states should actually assess whether a condition limits someone's ability to participate. This matters because CMS expects states to make evaluations that are in some ways more demanding than what the Social Security Administration does through its extensive process of medical examiners and vocational experts, but without any equivalent framework to rely on.
The paradox this creates is real. The disability definition used for care recipients under the caregiver exclusion is the broad ADA standard. The disability definition used for the medically frail exclusion is already much narrower, and then CMS adds a further requirement that the condition also limit the ability to participate in community engagement. The result is that a person may be considered disabled enough that their caregiver qualifies for an exclusion, while that same person cannot qualify for an exclusion themselves.
Our next newsletter will take a closer look at how CMS structured these exclusions, exceptions, and exemptions as distinct legal categories, and why those differences matter for how people in different situations will actually be treated.