Why work requirements for Medicaid are a bad idea

Along with Medicare and Social Security, Medicaid is one leg of the stool to protect our most vulnerable citizens. For many years it has provided funding for millions of nursing home residents. Since the Affordable Care Act (ACA), it has grown by leaps and bounds for two reasons: 1. Many low-income individuals seeking healthcare insurance from the exchanges learned that they were eligible for Medicaid; and 

2. Medicaid expansions in 31 states enrolled millions more people. January data reveals that more than 74 million people nationwide were enrolled in Medicaid as of November 2017 (Medicaid.gov). In Pennsylvania, that number is 2.9 million.

Furthermore, Medicaid has gained in popularity since the ACA. Nearly everyone knows someone who benefits from this program, whether it is a grandmother in a nursing home, a disabled relative or friend, or an acquaintance with a low-paying job or two who cannot afford to purchase insurance from the marketplace.  According to the Kaiser Family Foundation (KFF), nationally, Medicaid is comparable to private insurance for access and satisfaction (June 2017 Fact Sheet on Medicaid). In many cases, Medicaid is also more robust in coverage. Individuals and hospitals in rural areas, where healthcare resources are limited or far-flung, are particularly indebted to Medicaid.  States currently have resources and flexibility under Medicaid to experiment with new ways to deliver services for people with chronic illness and behavioral health conditions, including substance abuse and opioid addiction (Center on Budget and Policy Priorities, CBPP, January 19, 2018). 

Medicaid is the most vulnerable healthcare priority this year, as GOP legislators at both the state and federal levels devise strategies that would effectively end the program—from massive budget cuts and state funding caps to state waivers that would allow work requirements and other impediments to coverage. The expressed rationale for these bills—the need to cut costs or to reduce the greatly enlarged federal deficit (caused by massive tax cuts for the wealthiest Americans and large corporations)—is a ploy. The real goal of the current GOP leadership is to end our most critical safety net programs, one by one. These leaders are not evil people.  They are driven by beliefs in small government, the deserving rich, and the less-deserving poor. Unfortunately, most of the more extreme politicians who now control our government have very little understanding of the odds faced by people who are poor and/or burdened by parents, children or spouses who are severely sick or disabled in today’s America.

Having work requirements for Medicaid, probably the most deceptive strategy, would be very effective in kickingmany more than “undeserving” people off the program. There are two considerations here: 1) The majority of non-elderly Medicaid recipients are already working. 2) It is extremely punitive to make Medicaid recipients go through all sorts of paperwork and red tape to prove their status every year and with every job or life change. 

Among non-elderly Medicaid adults who do not qualify for Medicaid-eligible disabilities, 8 in 10 live in working families, and 6 in 10 are working themselves.Among recipients who are not working, most report obstacles to their ability to work including illness, a disability, care-giving responsibilities, or educational pursuits. (KFF. “Understanding the Intersection of Medicaid and Work,” updated Jan 5, 2018) This relatively small unemployed group includes people with opioid addiction, an epidemic in our country. 

Chasing down all non-elderly Medicaid recipients every year in order to “catch” a small number of able-bodied non-workers is not a cost-effective strategy. It is a waste of taxpayer dollars. More important, however, is the effect it will surely have on access to healthcare for thousands of current Medicaid recipients.

“How can this be?” you ask. If only a small percentage of able-bodied Medicaid recipients are not working, how can so many people lose their coverage under work requirements? Pennsylvania Health Access Network (PHAN) gives us some examples:  A person’s hours are reduced or they receive an incomplete pay stub.  They may not have the right paperwork or don’t know how to file it (especially true for those with a serious mental illness, substance abuse, or opioid addiction). If they don’t file the right paperwork, they missed a paperwork deadline, or the Medicaid office misplaced their documentation, individuals may be locked out of coverage for months at a time. In fact, people are now losing coverage when a state gets backlogged and does not process the paperwork even when it is filed on time. Think what will happen with the added paperwork for work requirements.

Under a new, Republican, governor, Kentucky was the first state approved to implement cumbersome work requirements. The state itself has estimated that 100,000 people (15% of its Medicaid population) will have lost coverage within five years (source CBPP, as reported by PHAN).  

The intent of work requirement legislation for Medicaid has nothing to do with getting people to work, and everything to do with cutting people off from Medicaid.  

Three weeks ago, the Pennsylvania House passed HB 2138, a bill that would force Medicaid recipients to file endless paperwork to prove that they work or are exempt from the law or be locked out of Medicaid for months at a time. PHAN estimates that this bill would strip more than 85,000 of their health coverage. It would cost Pennsylvania taxpayers $3.4 billion over six years with fewerpeople covered. The bill has moved on to the state Senate, with a vote expected sometime in June.

If you agree that work requirements for Medicaid are costly, ineffective, and punitive, now is the time to call your state senator:  Richard Alloway (District 33); phone: (717) 787-4651.  Or write to him on his state Senate web site.

Jeanne Duffy, Ph.D., has served as a college professor, an analyst and project manager for several large companies, and a college administrator in charge of foundation and government support. She is an active member of Gettysburg Democracy for America’s healthcare taskforce.