Medicaid Work-Requirements Seek to Straddle the Line Between Politics and Evidence

February 26, 2020

Utah recently became the eleventh state to receive CMS approval for a Medicaid expansion linked with work requirements for recipients. However, such Medicaid coverage linked to employment requirements has thus far been mainly blocked by the courts or withdrawn by states. The basis of judicial objection is that the original Medicaid statue does not allow the program to be deployed for moving low-income people up the socio-economic ladder.

Ironically, such controversy belies a shifting bi-partisan reality. Republicans and Democrats have both softened their positions on Medicaid expansion envisioned under the 2010 Affordable Care Act. Democrats in some states have agreed to work requirements as a trade-off so that more of the uninsured can qualify for medical coverage. And Republicans in several states have backed off their total opposition to expanding Medicaid to hold people accountable for public assistance.

In the case of predominantly Republican Utah, for example, voters approved a Medicaid expansion proposition in the 2018 mid-term election. The ballot initiative was later scaled-back by the state legislature, which included a work requirement and was approved by CMS in late December. However, the courts have thus far blocked several other initiatives advocated by the current administration to impose work requirements. It’s likely that Utah and South Carolina, which in early December also approved an expansion linked to work rules, may also be blocked by the courts.

If both political parties are evolving their positions, besides the courts, why is there opposition to Medicaid work requirements? In this blog, we will explore some of the implications of these work requirements to shed some light on this complex issue.

Complications:

1: Work requirements create burdensome bureaucratic red tape that will deny children needed care. There are a number of barriers to even seeking an employment, depending on the issues faced by some individuals. Meanwhile, especially where these individuals have uninsured children requiring medical care, immediate needs must be met. This, according to such groups as The American Academy of Pediatrics, the Children’s Defense Fund, and The March of Dimes.

2: In Arkansas, where the first Medicaid work rule was put into place, the number of uninsured increased by 18,000, while the unemployment rate was unchanged. This finding was the result of a Harvard study published in the New England Journal of Medicine in March. In Kansas, it was found that for only 11 percent of those on Medicaid would work requirements have any effect on their employment of job search; nearly all adults covered under the program were already employed or seeking employment.

3: Work requirement programs are expensive. An October report by the Government Accountability Office put the price tag just for five states implementing Medicaid work requirements at $408 million to taxpayers. In contrast, Medicaid currently covers about 65 million Americans at the cost of $560 billion to taxpayers.

Benefits

1: Advocates maintain that such “welfare to work” strategies help people break the poverty cycle via increased employment and earnings. The Trump administration, among other advocates, point to data points such as Montana, wherein 91 percent of 22,000 residents targeted under Medicaid enrollment (out of 94,000 total Medicaid enrolled residents), with job training and other job services, find employment.

2: Work requirements have already been successfully rolled out in other federal assistance programs. This includes Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Programs (SNAP). Most states that have adopted work requirements have made allowances for exemptions due to disability and other factors.

3: Work requirements promote higher earnings and discourage unemployment, which research links to poorer health. Also, the volunteer allowances in most Medicaid work requirements lead to better health and teach skills that can lead to paid employment.

The Commonwealth Fund projects that 600,000 to 800,000 people in nine states could lose their Medicaid coverage if work requirements are eventually upheld. Such insured populations loop back to a longstanding proven association impacting whole-person care driven by social determinants of health (SDoH). SDoH includes non-healthcare factors—such as lack of housing or food security, educational prospects, access to transportation, and instances of domestic violence—that impact health.

A 2018 analysis by Deloitte, for instance, confirmed a longstanding pattern of low-income patients, in the absence of other options, relying on the emergency room for primary care. Such conditions are detrimental to costs and outcomes, because not only is the emergency room the most expensive point of entry into the healthcare system, but emergency room physicians are not trained to treat the chronic medical conditions that often afflict low-income patients who repeatedly use emergency services.

Such patients can end up in the ER when their chronic disease has not been effectively managed, and they are in a medical crisis. Deloitte also cited a 2016 study that found that Medicaid patients visited an ER 39 percent of the time (compared to 30 percent for Medicare patients), compared to 53 percent for low-income and uninsured people.

According to a Kaiser Family Foundation analysis, several issues should be addressed for Medicaid work requirements to be practical:

1: Most Medicaid adults are already working; among those who are not working, most report barriers (i.e., disability, lack of child care) to work. Those with better health and more education are more likely to be working in the first place; the one problem cycles into the other.

2: Even when working, adults with Medicaid face high rates of SDoH financial and food insecurity, as they are still living in or near poverty. Most Medicaid adults who work are working full-time for the full year, but in low-wage jobs in industries with low employer-sponsored insurance (ESI) offer rates.

3: Many Medicaid enrollees face barriers to work, such as functional disabilities, severe medical conditions, school attendance, and care-taking responsibilities. Also, a higher proportion of adults covered by Medicaid do not use computers, the internet, or email, which could be a barrier in finding a job or complying with policies to report work or exemption status.

In sum, as work requirements in exchange for Medicaid expansion becomes a more salient bipartisan compromise across the nation, states would be wise to consider how SDoH issues factor into the equation, and to evaluate what supplementary programs could help make the vision behind the work requirements—improved income and increased employment—work as intended, compensate for unaddressed SDoH issues, and yield the desired results.