Medicaid Work Requirements Can’t Be Fixed
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- Unintended Consequences Are Inevitable Result
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Seven states have approval from the
Some have asked whether work requirements can be "fixed" -- in other words, whether such policies can be implemented without unintended consequences and with positive impacts on employment. The answer is no.
Taking coverage away from people who don't meet a work requirement is at odds with Medicaid's "central objective" of providing affordable health coverage to people who wouldn't otherwise have it, which means it's not an allowable use of Medicaid waiver authority under section 1115 of the Social Security Act. But in
Work requirement policies can't be fixed for several reasons. First, any work requirement will have the unintended consequence of taking coverage away from people who are already working or should be exempt due to illness, disability, or other factors. That's because rules for reporting and claiming exemptions increase paperwork and red tape, which cause eligible people to lose coverage and become uninsured. Efforts to inform beneficiaries of the complex compliance requirements and the processes for reporting and claiming exemptions are certain to fall short, leaving people without the information and help they need to comply. In addition, working Medicaid beneficiaries often have low-wage jobs with volatile hours and little flexibility, so they may not be able to work a set number of hours each month -- meaning that even people strongly attached to the labor force will lose coverage.
Second, work requirements are ineffective in promoting employment because they don't accurately identify those who can work but aren't working (often for reasons beyond their control), nor do they assess their needs or provide them with supports. And they can undermine work when people can't get the health care they need to work or look for a job. Experience from the Temporary Assistance for Needy Families (TANF) program shows work requirements don't significantly increase long-term employment and don't reduce poverty. That's even more likely the case with Medicaid: while TANF programs generally provide for at least some (albeit inadequate) supportive services that many low-income adults need in order to work, such as child care, job training, and transportation assistance, states implementing Medicaid work requirements aren't required to provide any of that help.
Moreover, Medicaid is itself a work support. It makes affordable health coverage available to low-wage workers whose jobs don't offer it and makes it possible for people with diabetes and other chronic illnesses to work by helping them control these conditions. Recent news reports from
Even if work requirements could somehow avoid unintended consequences, they would still do harm: among Medicaid beneficiaries who aren't working and don't qualify for exemptions, many face major barriers to work and have serious health needs.(4) But the unintended consequences can't be avoided.
Paperwork and Red Tape Cause Eligible People to Lose Coverage
If implemented nationwide, work requirements would cause disenrollment ranging from 1.4 million to 4 million people among the 23.5 million adult Medicaid enrollees who are under 65 and not receiving Supplemental Security Income based on disability,
See chart here (https://www.cbpp.org/research/health/medicaid-work-requirements-cant-be-fixed).
The researchers reach these conclusions based on evidence from past eligibility restrictions in Medicaid. For example, when
When people who are already working or unable to work have trouble reporting their work hours or proving they are exempt, they lose coverage even though they are not the target of work requirements. This appears to be the case in
Some have treated
Likewise, people coping with serious mental illness or physical impairments may face difficulties obtaining physician testimony, medical records, or other documents required to qualify for exemptions. Mental illness often affects the cognitive functions needed to navigate complex bureaucratic systems, making it hard for someone to qualify and often leading them to give up and drop out of the process.(10)
Studies of state TANF and Supplemental Nutrition Assistance (formerly food stamp) programs have found that people with disabilities, serious illnesses, and substance use disorders may be disproportionately likely to lose benefits, even when they should be exempt. The Americans with Disabilities Act (ADA) requires states to provide "reasonable modifications" to ensure people with disabilities can participate in public programs, and work requirement waivers the Administration has approved require states to provide such modifications. Yet
On top of these challenges, Medicaid beneficiaries must understand the complex rules on who must comply with the work requirement, who is exempt, how long exemptions last, and how to report work hours or potential exemptions. In
Most Medicaid beneficiaries don't directly interact with caseworkers when applying for or renewing coverage and will instead receive information about the work requirement through long, complex paper notices.
What's more, in some respects
Second,
Working People Will Lose Coverage Due to Rigid Work Requirements
Most non-elderly adult Medicaid beneficiaries already work, but in low-wage jobs that generally do not offer health insurance. The two industries that employ the most Medicaid enrollees potentially subject to work requirements are restaurant/food services and construction, with large numbers also working in grocery stores, department and discount stores, and the home health industry.(17) These industries are characterized by volatile hours and little flexibility, so beneficiaries may not be able to work the required number of hours every month. Illness, family emergencies, or a lack of child care or transportation can also lead to job loss or shortfalls in hours.
Most states planning or considering work requirements are proposing that beneficiaries work at least 80 hours each month. Our analysis shows the difficulties that low-wage work presents in meeting such a rigid work requirement. (18) We found that 46 percent of low-income working adults who could be subject to Medicaid work requirements would be at risk of losing coverage for one or more months because they wouldn't meet the 80-hour requirement in every month. (See Figure 2.) Even among people working 1,000 hours over the course of the year -- enough on average to meet the 80-hour monthly requirement -- 1 in 4 would be at risk of losing coverage for one or more months because they would not meet the minimum in every month. This is in addition to those who would lose coverage because of the red tape and paperwork inherent in work requirement policies. (Notably, the Kaiser estimates cited above take into account coverage losses among low-wage workers due to reporting burdens, but not due to volatile hours.)
See chart here (https://www.cbpp.org/research/health/medicaid-work-requirements-cant-be-fixed).
Other researchers reach similar conclusions about the volatility of low-wage work, finding that 80 percent of Medicaid beneficiaries aged 18 to 49 without a dependent child under 6 were in the labor force at some point over a two-year period from 2013 to 2014. (19) But while about half of these beneficiaries consistently worked 20 hours a week, the rest either fell below that threshold or were out of work at some point over the two-year period, which would put them at risk of losing coverage. The researchers also found that looking at work status for just one month understated the share of working beneficiaries relative to their findings from work activities examined over a two-year period. In other words, many people not working in a specific month do work over the course of a longer period, suggesting a share of non-workers in the monthly data are between jobs.
Taking coverage away from people who don't work a set number of hours because they are between jobs, can't make a rigid monthly hours target, or have temporary barriers such as illness or a lack of child care does nothing to encourage work; it just deprives working people of coverage and access to care.
Work Requirements Don't Increase Long-Term Employment or Reduce Poverty
Among the justifications that the
CMS argues that penalizing beneficiaries by taking their coverage away is necessary "to create an effective incentive for beneficiaries to take measures that promote health and independence."(21) In other words, CMS claims that the only way to increase work among Medicaid beneficiaries is to take their coverage away if they don't work. But research on work requirements in federal cash assistance programs -- TANF and its precursor, Aid to Families with Dependent Children -- finds that employment increases for those subject to work requirements are generally modest, fade over time, and don't move many families out of poverty.(22) For example, a synthesis of results from randomized trials of 13 programs imposing work requirements in cash assistance programs finds that employment rose by modest amounts in the first two years, but these gains generally faded by year 5 (to an average effect of about 1 percentage point).(23) Meanwhile, stable employment proved the exception, not the norm, and few enrollees transitioned out of poverty as a result of the work requirements.
For several reasons, work requirements in Medicaid will likely have equally or more disappointing results. Sixty percent of adult Medicaid enrollees potentially subject to work requirements already work, and more than 80 percent of the remainder are students or report that they are unable to work due to a disability, serious illness, or caregiving responsibilities. This suggests limited scope for work requirements to increase work participation.(24)
Meanwhile, cash assistance programs generally provide at least some (albeit inadequate) resources for the supportive services that many low-income adults need in order to work, such as child care, job training, and transportation assistance. The more successful experimental programs described above coupled work requirements with robust work supports. In contrast, Medicaid work requirements won't help the small share of beneficiaries who aren't working but who could work with supports such as child care, transportation, or job training, because these supports aren't available to beneficiaries. Federal Medicaid funds can't pay for these supports, which many Medicaid beneficiaries need to work a set number of hours each month. Other state workforce programs don't have the resources to meet the needs of low-income Medicaid beneficiaries who often live in rural areas without public transportation, who lack job skills, and who are taking care of children and other family members.
Moreover, it makes no sense to target people who can work but are between jobs, because they will likely find work on their own and move out of the target group. States would be better off implementing a program like
Medicaid Is a Work Support; Taking It Away Will Impede Work
Low-income adult Medicaid enrollees have high rates of chronic conditions and mental illness; for example, 69 percent of adults enrolled through
Finally, most jobs that Medicaid beneficiaries already have or are likely to get are low wage, neither paying enough for them to shift into subsidized individual market coverage nor offering employer-based coverage, so they would still need Medicaid. Among workers with earnings in the bottom fourth of the wage distribution, only 37 percent are offered health coverage by their employer, according to
Policymakers Should Heed Advisers' Call to Pause Policy
Medicaid work requirements can't be fixed: other states that implement work requirements will see the same unintended consequences as
Footnotes:
(1) The states are
(2)
(3) "With new work requirement, thousands lose Medicaid coverage in
(4)
(5)
(6)
(7) Proof generally included a birth certificate or passport along with other proof of identity.
(8)
(9)
(10)
(11)
(12) "Taking Away Medicaid for Not Meeting Work Requirements Harms People Experiencing Homelessness," Center on Budget and Policy Priorities, updated
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(14)
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(16) Arkansas Works Program,
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(18)
(19)
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(21) CMS Letter approving Kentucky HEALTH,
(22) See
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(24) Garfield, Rudowitz, and Damico.
(25)
(26)
(27)
(28)
(29)
(30)
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(32) Medicaid and
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