Reality seems to be catching up with Medicaid work requirements, as a half-dozen states have rolled back or suspended their plans and others are reconsidering the option.
In most of those states, rules throwing people off Medicaid rolls if they can't show that they've worked or sought work have run into legal challenges, adverse court rulings or the discovery that they cost more than expected or affect more households than anticipated.
That's the finding of a survey by Jessica Schubel of the Center on Budget and Policy Priorities released this week. Schubel observes that work requirement policies have been reversed or suspended in Arizona, Indiana, Kentucky, Maine, New Hampshire, and Virginia in the last year.
In Michigan and Wisconsin, newly elected Democratic governors are pushing back against the policies but have thus far been thwarted by Republican legislatures.
None of this means that the idea is dead. It's still strongly supported by the Trump administration despite questions about its legality and cost-effectiveness. Just last month, Trump's Medicaid and Medicare chief, Seema Verma, made a personal appearance in South Carolina, standing shoulder-to-shoulder with its GOP Gov. Henry McMaster to launch that state's Medicaid work rules.
And Utah is plowing ahead with a rule requiring many enrollees to show that they have conducted 48 job searches within the first three months of their Medicaid enrollment or face ejection. The state estimates that as many as 8,000 enrollees will lose their coverage.
Medicaid work requirements emerged as a policy choice in response to the Affordable Care Act's Medicaid expansion provision, which allows states to bring low-income childless adults into the program for the first time, with the federal government covering more than 90% of the cost.
Conservative legislatures and governors balked; 14 states still haven't expanded Medicaid, although Kansas is poised to join the expansion club following a deal reached between its newly elected Democratic governor and Republican legislative leaders.
Several states responded to the ACA initiative by imposing work requirements on the new enrollees, and in some cases on enrollees in traditional Medicaid, which was focused on low-income families with children.
Typically, the rules required Medicaid enrollees to document that they had worked a given number of hours in a month or lose their coverage. Exemptions were customarily provided for caregivers, students, the disabled or those enrolled in job training.
The putative rationale for these rules was to prompt enrollees to join the economic mainstream; the Trump administration's euphemism for work requirements is "community engagement." But the rationale was based on the erroneous assumption that Medicaid harbored malingerers and layabouts who could work if they chose. The truth is that the vast majority of enrollees already are working.
The notion that forcing them to work would improve enrollees' health is also backwards, because health problems are an important reason why many people can't work. One of Medicaid's goals is to improve the health of enrollees so they're better able to find and keep employment, so denying people coverage actually reduces their ability to join the workforce.
The truth is that in many states, Medicaid work requirements were overtly designed to be punitive. That was the case in Kentucky, where tea-party Gov. Matt Bevin inaugurated a sheaf of draconian enrollment obstacles in 2018; the rules have been ditched by the state's newly elected Democratic Gov. Andy Beshear.
In Arkansas, the first state to fully implement the policy, the paperwork and reporting process was onerous; work hour reports had to be made by enrollees online, even though the reporting website has been out of order for long stretches and many enrollees don't have adequate internet access.
As we've reported, the Arkansas record on Medicaid work requirements has been entirely negative. A study by Harvard researchers published in September found that in the group targeted by the first phase of the Arkansas policy - those aged 30 to 49 - coverage from Medicaid and Affordable Care Act marketplace plans declined by a stunning 12 percentage points.
As for the idea that work requirements would reduce unemployment, the study "did not find any significant change in employment ... or in the related secondary outcomes of hours worked."
Medicaid work rules, in short, have turned out to be pound-foolish without ever having shown the virtue of being penny-wise.
Official state statistics showed that by December 2018, the Arkansas policy had resulted in 17,000 residents losing their eligibility. That was enough to unnerve U.S. Judge James E. Boasberg, who last March ordered the policy suspended.
Finding that Health and Human Services Secretary Alex Azar hadn't bothered to look into the possibility of mass disenrollments, Boasberg also blocked the Kentucky policy. His rulings that the approval of work rules by HHS was "arbitrary and capricious" under the law have prompted several of the other states contemplating such rules to think twice.
As CBPP's Schubel reports, here's the current state of play of Medicaid work requirements among states other than Kentucky and Arkansas.
- In Maine, Democratic Gov. Janet Mills, who took office in January 2019, promptly withdrew the application for work requirements filed by her GOP predecessor, Paul LePage. "The likely result of this ... demonstration," she told Verma, "would leave more Maine people uninsured without improving their participation in the workforce."
- New Hampshire suspended its work rules in July, after realizing that as many as 20,000 residents or nearly 40% would lose eligibility. Outreach efforts hadn't worked and cost the state $187,000.
- Arizona indefinitely suspended its plans, citing "ongoing litigation and "the evolving national landscape."
- Indiana has suspended its plans for a work requirement, pending the resolution of a lawsuit challenging the proposal.
- In Virginia, Democratic Gov. Ralph Northam has placed its application to impose work rules, on "pause," given that the Democratic takeover of the state legislature makes the proposal a dead letter, especially since the rules might deprive as many as 75,000 residents of coverage.
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