Health care repeal masquerading as tax reform
November 14, 2017
New attack on Medicaid could erect barriers to care
Posted on 12/05/17 by Katie Fallon in Basic Needs + Unemployment Insurance
This year, Congress has repeatedly tried and failed to repeal the Affordable Care Act (ACA) and Medicaid expansion. Despite these unsuccessful attempts, the Trump administration is taking new steps to restrict health care. Last week, the Centers for Medicare and Medicaid Services (CMS) signaled that it will allow states to impose work requirements for Medicaid enrollees and other changes that may strip Medicaid access from many Ohioans.
Medicaid’s services and requirements are defined in statute and in rule, both state and federal. The federal government allows certain rules to be waived if a state requests permission, and explains how waiving the rules will allow for testing of new service delivery approaches that may make the overall program work better. These allowances are called “waivers” and they may be granted under various parts of the federal law. Section 1115 waivers specifically are intended to give states the flexibility to test new approaches to Medicaid. Initially, waivers were meant to expand eligibility and access for low-income Americans, provide new services, or use innovative service delivery to improve care, increase efficiency, and reduce costs. As of 2017, 38 states had already used 1115 waivers for demonstration projects.
Photo: U.S. Department of Agriculture
The recent statement by CMS shifts the goals of waivers from expanding Medicaid access and affordability, to “increasing efficiency” and reducing enrollment numbers. This paves the way for Section 1115 waivers to restrict access to Medicaid through work requirements or other deterrents. Eight states—Arizona, Arkansas, Indiana, Kentucky, Maine, New Hampshire, Utah, and Wisconsin—have already submitted requests to CMS seeking to require non-disabled Medicaid beneficiaries to engage in work or work-related activities as a condition of receiving coverage. States requesting work requirement waivers claim there are or will be positive outcomes from requiring Medicaid recipients to work.
There are currently no work requirements within Medicaid programs, which makes the claims difficult to evaluate. However, debates on work requirements can draw on findings from similar programs like Temporary Assistance for Needy Families (TANF), which implemented work requirements.
Those in favor of work requirements argue they will incentivize work and help enrollees transition out of Medicaid. They point to declines in caseloads and increases in employment for single mothers and individuals with significant barriers to employment. However, findings suggest that these expectations are unrealistic and unlikely. Rather, Work requirements are likely to lead to barriers to care, higher administrative costs, and few meaningful gains in employment, if past work requirements in other programs are any guide.
- Most enrollees work: A majority of Medicaid enrollees are already working, looking for work, going to school, or caring for a relative. In Ohio, 81 percent of the non-elderly or disabled in Medicaid are from working families and 66 percent work themselves. Nationally, of those who were not working, 29 percent were caring for a family member, 33 percent could not work due to disability, and 17 percent were going to school. Less than 5 percent were voluntarily not working. Given the high rate of those already working, these requirements would have a narrow reach and would negatively affect those who are looking for work or not working due to illness or care-giving responsibilities.
- Small, temporary gains don’t hold up: Studies find the small work gains achieved from TANF’s work requirements diminished substantially over time and had a limited effect on long-term employment and income growth. Labor economists find that increases in employment following introduction of work requirements are small and short-lived. Removing people from Medicaid for failure to work would likely reduce the number of those able to access coverage, while failing to provide pathways to employment.
- Medicaid helps enrollees find work: Medicaid has been shown to help people find and maintain work. Three-quarters of beneficiaries in Ohio who received care under Medicaid expansion and were looking for work reported that Medicaid made it easier to do so. For those who were currently working, more than half said that Medicaid made it easier to keep their jobs. Medicaid receipt itself has generally improved work and work effort among enrollees. A work requirement would likely reduce the number of people who could access care through Medicaid and there’s no evidence that it would increase employment among poor families.
- Reducing reliance on Medicaid: Research examining TANF found only one-third of individuals who transitioned off of TANF were able to obtain health insurance through their jobs. Almost half of the jobs held by Medicaid beneficiaries are at small firms not subject to the ACA employer mandate to provide health insurance, and 40 percent of Medicaid beneficiaries worked in the agriculture and service industries, which have low employer-sponsored insurance rates. Research on TANF outcomes, coupled with labor market realities facing people eligible for Medicaid, indicate that the great majority of Medicaid recipients would not get private health care coverage if they took a job.
Rather than providing gains, work requirements are likely to erect barriers to care and fail to increase employment because non-disabled adults covered by Medicaid are already working or meet other exemptions.
Studies of outcomes in the TANF work requirement programs reveal another warning for applying this mandate to Medicaid: enrollment will decline. Work requirements in TANF led to substantial losses in coverage; the number of families receiving TANF declined by 50 percent from 1997 to 2010, with some states experiencing declines of over 80 percent. These effects were more pronounced for states with stricter enforcement. States considering work requirements for Medicaid, including Kentucky, Indiana, and Maine, all project enrollment declines. Kentucky in particular estimates that 95,000 fewer people would be covered by the fifth year of its proposed waiver than under its current program.
Elected officials may believe that work requirements will lead to work that provides private coverage. But research on similar approaches in human service programs and studies by labor economists outline the fault lines in that rosy view. Rather, this plan is likely to harm those who are most vulnerable and who rely on services like Medicaid. Americans have already voiced their support for the ACA and Medicaid expansion several times in 2017. State-based waivers which expand punitive measures like work requirements are another way of attacking health coverage and going backward. The ACA and Medicaid dramatically increased the number and share of Ohioans who are insured and able to obtain health care. Ohio should continue to maximize eligibility.