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17 USC 102

Medicaid Work Requirements are Popular, but Wrong

June 29, 2018

 

Medicaid has perhaps never been stronger. At the same time, the program and its beneficiaries have perhaps never been under more duress.

 

According to federal data, more than 67.5 million individuals are enrolled in Medicaid, a figure that has increased by millions since the adoption of the Affordable Care Act. The vast majority of new enrollees and the largest increases in enrollees took advantage of a specific provision of the ACA that allowed the states and U.S. territories (whose Medicaid programs are counted the same as one of a state but differ in structure) to choose whether they wanted to participate in Medicaid expansion. For the first few years for states that chose to participate, the federal government covered 100 percent of the cost of newly eligible enrollees and that figure would then later drop to a still substantial 90 percent. The law, as originally written, would have created a national standard stipulating that anyone with income up to 138 percent of the national poverty level would be eligible for Medicaid. However, in the same Supreme Court decision that largely upheld the ACA as a whole, the Court ruled that expansion be left to the states.

 

More than thirty states, some as conservative as Indiana and Louisiana, as well as the District of Columbia elected to participate in ACA Medicaid expansion. Despite the common goal of expanding coverage, the programs differed from state to state. For example, Indiana’s conservative plan, dubbed Healthy Indiana Plan 2.0, mandates that people with income between 100 and 138 percent of the poverty level pay into a POWER account (which the government uses to pay for covered services including dental and vision services but not co-pays). If they fail to make a payment, they are not only stripped of their coverage but also barred from re-applying for six months. Liberal think tanks are more critical of HIP 2.0’s treatment of those below the poverty line. Low-income Hoosiers are on HIP Basic, which excludes dental and vision and features substantial co-pays. They can subscribe to HIP Plus (which covers dental and vision) by paying a premium. The Center for Budget and Policy Priorities bashed Indiana’s program as confusing and insufficient, finding that 84 percent of those bumped from HIP Plus to HIP Basic were confused by the payment process in addition to being priced out. The Center and other critics would argue that the Indianan plan creates a class system in healthcare that treats poorer people not only as second-class citizens but actively seeks to undermine their chances of acquiring affordable care.

 

“The good news is that Indiana is a state that bought into Obamacare,” Joan Alker, a Georgetown professor who is the executive director of the Center for Children and Families, told The Atlantic. “The bad news is that [former governor Mike] Pence’s vision of coverage has a lot of barriers.”

 

Despite the barriers, less than two years after HIP’s adoption, more than 419,000 Hoosiers were enrolled in HIP Plus, a dramatic increase from the 40,000 whose incomes qualified them for coverage before Medicaid expansion. Indiana’s program served as a nationwide model for conservative states that wanted to expand coverage while still emphasizing personal responsibility.

 

With Pence now serving as President Trump’s vice president, the Administration has shown a willingness to take parts of this idea to the next level and beyond Indianapolis. In early 2018, the Administration directed the Center for Medicare and Medicaid Services to allow states to mandate that Medicaid recipients show proof of certain employment standards in order to qualify for the program. Thus far, several states, including Arkansas, Kentucky, and Indiana, have won approval from the U.S. Department of Health and Human Services to implement these work requirements, usually stipulating that able-bodied potential Medicaid recipients show proof of having worked 20 hours a week or 80 hours a month, though the exact details vary by state (Michigan’s plan calls for 30 hours per week). In the half-century history of Medicaid, such requirements have never existed before. While the Obama Administration allowed for states to adopt many different changes to the Medicaid program, they drew the line at work requirements, the legality of which has not been settled yet. Yet there is substantial support for the new policy. A poll from the non-partisan Kaiser Family Foundation shows 70 percent overall support for work requirements and a 2017 poll from Morning Consult and POLITICO shows 67 percent support among Republicans, 51 percent among all Americans, 46 percent support among independents, and almost 40 percent among Democrats.

 

The evidence is convincing: Medicaid work requirements are popular. But that does not make them right, it does not make them effective, and it certainly does not make them legal.

 

One of the arguments supporters of work requirements make is that these new limits would cut down spending and purge the Medicaid rolls of people trying to take advantage of the system by receiving tons of government money and refusing to engage in their communities. There is also a school of thought that says that work requirements will actually reduce unemployment, but before sensible, well-meaning arguments must be considered, it is important that we first acknowledge the repugnant and pervasive arguments to be what they are: generalizations made with no remote basis in fact but instead in vile political rhetoric and stereotypes.

 

For years, one of the main punching bags of Republican politics has been the “welfare queen.” This very derogatory term has been used to describe people who are enrolled in public assistance programs and supposedly exploit them, committing fraud and/or refusing to work. During both of Ronald Reagan’s campaigns for the presidency, he repeatedly admonished the “welfare queen,” and during the bipartisan welfare reform period of the Clinton Administration, the characterization was again weaponized as a political tool. The success of Reagan, Newt Gingrich, and others in persuading much of America to believe in widespread rigging of the system passed a powerful baton to today’s GOP with momentum. Kentucky Governor Matt Bevin (R) explained that work requirements were sensible because, “Why should somebody have to go to work every day and pay taxes to provide something to someone who could do the same thing, but chooses not to? That’s very un-American.” Governor Bevin seems to think that there is a major conspiracy out there of people dependent on public assistance who are just too lazy to pull themselves up by their bootstraps and get a job. That is easily disprovable.

 

According to the Kaiser Family Foundation, 60 percent of working-age, physically able Medicaid recipients are already working. Furthermore, nearly 80 percent of recipients live with someone who is working. In fact, in states that expanded Medicaid (like Bevin’s own Kentucky did under his Democratic predecessor), Medicaid recipients are more likely to be working than in states that did not. In perhaps the biggest refutation of the “welfare queen” theory, KFF found that 90 percent of those who do not work and are Medicaid recipients are physically or mentally ill to the degree that it interferes with their ability to work, disabled, in school, or retired.

 

What is really “un-American” is how conservative politicians take advantage of media portrayals of Americans on public assistance. During the Reagan years, the perception of public assistance recipients shifted from white Appalachian farmers and manufacturing employees to urban poor blacks. In 1973, 75 percent of images of welfare recipients featured African-Americans, despite the fact that they made up just over a third of the welfare rolls and less than 13 percent of the population. When Republicans embraced law and order and personal responsibility, these buzzwords coordinated with stereotypes about African-American women, namely that they were “lazy” and careless in that they supposedly had too many children. With political rhetoric and media images showing a relationship between poor, black, and lazy, many became warier of public assistance programs. This image persists to this day despite the fact that African-Americans on Medicaid work at an almost identical rate as whites on Medicaid. Clearly, today this perception is nothing more than a repugnant stereotype that in no way mirrors reality.

As stated earlier, some legislators believe that unemployment will fall and compliance in paying into the POWER accounts in systems like Indiana’s will be reinforced with work requirements. While initially some may find work and Medicaid enrollee cuts would initially be fairly small, the overwhelming majority of analyses project that there will be many working and Medicaid beneficiary Americans who will be left behind by the imposition of work requirements.

 

Conservatives like to claim that policies like work requirements push people off of public assistance and into the workforce. This would at least be a theoretical possibility if Medicaid work requirements actually created jobs. The problem is, they do not. Work requirements impose a minimum number of hours per week or month that an individual must work to become eligible for enrollment in a certain assistance program, but do not actually give anyone a place to complete those hours of work or guidance to find employment. Demanding that people work and punishing them for not working jobs that do not exist is cruel and pointless. It does not help push people into the workforce because, quite simply, if a person loses their health insurance coverage, they are more likely to become ill and thus more likely to be unable to work. One has to be healthy to work, yet this policy operates under the inverse assumption, which defies every established principle of public health common sense.

 

Most of the pending state work requirements also refuse to guarantee job training or volunteer opportunities or assistance in finding these kinds of opportunities either. This disproportionately affects those who will have recently lost their jobs and need a certain number of volunteer or job training hours to qualify for Medicaid, especially given how difficult it is for a recently laid-off worker to line up opportunities for training or volunteer work alone.

 

This is why some prominent Democrats have come out in support of a federal jobs guarantee, which would guarantee a job with a living wage and health benefits similar to those of any other federal employee. The program would both create jobs with salaries that would compete with (and ultimately drive up) those of jobs in the private sector and ensure that low-income Americans have access to affordable healthcare.

 

While the job guarantee is still hypothetical, these work requirements are very real, and the consequences they would inflict upon low-income Americans are real as well. As stated earlier, most non-elderly, non-disabled Medicaid recipients work but they tend to work in low-wage, less stable jobs that may not offer health insurance or a consistent schedule. Because of this overlooked fact, the Center on Budget and Policy Priorities estimates that 46 percent of low-income workers impacted by Medicaid work requirements could lose coverage. That is catastrophic, especially for a tweak to the program that is intended to incentivize employment. There simply are not enough new jobs available to remedy that failing, so these people will be completely without work and eligibility for Medicaid.

 

Furthermore, those who work without a consistent schedule are also targeted despite the new change’s intention of incentivizing working. Even 25 percent of those who work 1000 hours per year, or in an average week meet the popular state minimum requirement of 20 hours, will risk losing Medicaid coverage because they failed to meet the 80-hour monthly minimum every month. Policy changes also ensure more paperwork, and when a policy devoted to individual responsibility is crafted, the burden is placed on the citizen and not the government to fill it out. By making Medicaid transfer payments contingent upon the reception of this paperwork, clerical errors or sheer confusion about the paperwork needed to verify that a person met the work requirement will assuredly lead to more low-income people losing coverage for reasons that should be utterly inexcusable in the wealthiest nation in the history of the world. Quite simply, the realities of the job market, labor force, and bureaucracy ensure that Medicaid work requirements could explicitly punish many of the very people their supporters claim they benefit. A policy that truly encourages employment would create jobs, make the necessary paperwork easier, not more difficult, and promote public health to ensure that people are able to work rather than the inverse. Then again, this is not a policy that acknowledges and reacts to its deficiencies in solving the real-world problem of unemployment. Instead, it is a policy that continues conservative efforts to dismantle the New Deal state and targets the fictitious problem of the welfare queen all in order to appease rich donors by attempting to pay for the ridiculous tax cuts they received at the expense of the very people who benefit from the social safety net.

 

Perhaps the most overlooked element of the debate over work requirements is the legality of it all. Later this month, the U.S. District Court in D.C. is expected to rule on a class-action lawsuit brought forth by 15 Kentuckians enrolled in Medicaid that alleges that the imposition of work requirements violates the established authority of the Secretary of Health and Human Services under the Social Security Act. Governor Bevin responded to the lawsuit by initiating an executive order that would intimidate those seeking relief from the courts by terminating the Medicaid expansion that was implemented by his Democratic predecessor if the work requirements are thrown out by a court. The severity of this threat would lead one to believe that the legal argument is winnable for the petitioners. The evidence is indeed strong.

 

The Medicaid program is run by a government agency called the Centers for Medicare and Medicaid Services (CMS), and all work requirement waivers filed by states had to be approved by the agency. Like any other federal agency, CMS has only the statutory authority granted to it by Congress. When Congress passed the laws establishing and clarifying eligibility for Medicaid, they enumerated exactly who would be eligible for Medicaid, a certain minimum set of benefits, and other conditions of the program, as well as ceding to CMS the ability to waive some provisions of Medicaid to test new methods of providing coverage. However, Congress did not give CMS the power to create new barriers to access (like work requirements) for otherwise eligible Medicaid recipients. When Kentucky and others acted with only the approval of CMS and not Congress in changing the eligibility pool for Medicaid, they violated the stated powers of CMS and the states with regard to the insurance program, the legal argument goes. As it is indisputable that Congress was not consulted, and work requirements do drastically change who is eligible for Medicaid by kicking off otherwise eligible people, this is a reasonable claim.

 

Additionally, the guidelines of CMS dictate that it can only approve waivers that are intended to further the objectives of Medicaid. When Lyndon Johnson first sought to push through the law establishing Medicaid, he was undoubtedly seeking to help neglected or vulnerable individuals (such as the poor and the disabled) obtain healthcare coverage that addresses their needs. When Medicaid expansion was coupled with the passage of the Affordable Care Act, it demonstrated that this image of Medicaid’s purpose persists. Work requirements undermine this objective as they will cause many vulnerable people to lose their coverage and will create new barriers that make it more difficult to obtain coverage in the first place.

 

Furthermore, the ACA is still the law of the land, despite the efforts of congressional Republicans, and it determines Medicaid eligibility solely by income and not employment status. States could choose to approve or reject expansion under those terms but could not unilaterally rewrite their programs so as to limit the benefits required by law, create new eligibility guidelines, or refuse to cover certain groups of people. Only Congress could rewrite Medicaid eligibility and CMS cannot skirt the bylaws of the program as they are currently written. If the court rejects the principle of congressional supremacy over the states and government agencies, not only will hundreds of thousands of people lose their coverage, but there would also be a green light for the Trump Administration to gut other public assistance programs like SNAP and public housing under the guise of individual responsibility.

 

Whereas work requirements were once a conservative fantasy, they have now been integrated into many American public-assistance programs like Temporary Assistance to Needy Families and now Medicaid. And clearly, polling suggests that many Americans are okay with that. But that does not justify them or make them more legal. At a time when healthcare costs are skyrocketing and wages are stagnant, the answer is not to tell every low-income American to pull themselves up by their bootstraps; it is to ensure they have the boots in the first place.

 

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