Medicaid Work Requirements Are Increasing the Cost of Being Poor and Sick in America – Medical Bag

February 13, 2019

Watching the news leading up to — and following ­— the midterm elections, it has become increasingly apparent that as a country we have abandoned a general sense of kindness in favor of political tribalism. The biblical concepts of generosity, humanity, and neighborly love are convenient selling points that are all too often inconvenient in practice or policy. In an environment in which fact-based policy has taken a back seat to anecdotal rhetoric, we find ourselves searching for the moral high ground amid towering false truths.

Our English forefathers, 450 years ago, tried to distinguish between what they called the deserving poor (individuals who wanted to work but could not) and the idle poor (individuals who were able to work but were simply “lazy”). In 2018, we are still following their lead, further muddying the waters of healthcare policy.

For example, in 2018, the Centers for Medicare and Medicaid Services (CMS) began supporting state efforts to add a work requirement — or in some cases, a volunteer requirement — being linked to Medicaid coverage. This is possible under the 1962 Social Security Act; section 1115 allows for an “experimental, pilot, or demonstration project” aimed at “promoting the objectives of the Medicaid program.”¹ It hardly seems conscionable that anyone would think withholding healthcare in some way promotes it.

Essentially CMS claims to be performing an experiment based on the premise that unemployment contributes to poor health, a conclusion CMS has come to by reviewing studies that have shown an association between poor health and unemployment.¹ It may be time to sit down with policy makers and explain that correlation does not imply causation.

On the surface, a plan to get able-bodied individuals back to work in order to maintain their Medicaid benefits sounds reasonable. In fact, one might go so far as to argue that getting individuals to work might help them get health insurance and thus not need Medicaid support. However, this sly argument is based on the often ignored and widely accepted fallacy that the majority of individuals who receive Medicaid assistance aren’t working. We know that the opposite is true because of numerous studies^2,3 showing that the majority of Medicaid recipients are employed. 

We have to wonder whether the true goal of adding a work requirement to Medicaid is to decrease expenditures while punishing the so-called idle poor. In Kentucky, Republican governor Matthew G. Bevin sought to reduce Medicaid enrollment by 16% to ensure the financial future of the program by imposing a work requirement.² The problem with his assertion is that the numbers aren’t based on facts; there is no massive cohort of Medicaid beneficiaries sitting idle and avoiding work.

To test these claims, Anna L. Goldman, MD, MPH, of the Harvard TH Chan School of Public Health in Boston, Massachusetts, and colleagues, used the results of the 2015 Medical Expenditure Panel Survey to calculate Medicaid enrollment and expenditures and the impact of the work requirement waivers proposed by Kentucky, Indiana, Arkansas, and New Hampshire. The researchers found that if work requirements were applied nationally with all the current exemptions, only 2.1 million individuals would be at risk for disenrollment from Medicaid. This number represents only 2.8% of current Medicaid enrollees who account for a total of 0.7% of Medicaid spending.² In the states that have expanded Medicaid coverage under the Affordable Care Act (ACA), only 3.4% of the current total Medicaid enrollment would be at risk for disenrollment — or 1.1% of total Medicaid spending. In states that did not expand Medicaid, the work requirements would affect far fewer individuals — approximately 0.8%, with a total impact of 0.04% of total Medicaid spending.²

This data reveals that the majority of individuals currently receiving Medicaid benefits are either already employed or unable to work.^2,3 In fact, a state-level analysis of Medicaid work requirements by David M. Silvestri, MD, MBA, of the Yale University School of Medicine in New Haven, Connecticut, and colleagues, found that nearly all Medicaid-eligible individuals already meet the proposed work requirements or exemptions.³ Moreover, the expected savings to Medicaid if these work requirements were implemented nationally would be minimal.^2,3 You have to ask yourself: Where did Governor Bevin get his 16% figure?

Critics of the Medicaid work requirements are not against getting people back to work. They are concerned about the spillover effect; that is, when otherwise exempt Medicaid enrollees are unenrolled because they are unable to comply with the additional documentation requirements to prove their exemption. Proponents of the work requirement probably view this as a negligible consequence, but Drs Goldman and Silvestri have shown that it is more likely that these individuals will be unenrolled from Medicaid than individuals who fail to meet the work requirement.

For example, disabled individuals with serious cognitive dysfunction, vision or hearing loss, or self-care deficits may not meet the requirements for supplemental Social Security income. Because they do not meet those requirements, they are required to submit alternative documentation to prove their disability.² However, this is a group of people who might have a difficult time clearing those bureaucratic hurdles. Of note, these individuals represent 16.6% of all enrollees — a much larger percentage than the number of unemployed, unexempted Medicaid recipients.

The dilemma may not be about getting people back to work or reducing the cost of Medicaid; it may be all about scoring political points. The thought of someone taking advantage of social welfare programs runs so contrary to our notion of self-reliance that whenever we see injustice we are driven to eradicate it, even if the method comes at the cost of withdrawing help from some of America’s most vulnerable populations. This desire to punish the idle poor is counterproductive.

In a study that evaluated the risk for losing coverage under a work requirement policy, the investigators found that 25% of the total number of individuals who met the required hours were at risk for losing coverage because they would not meet the threshold number of hours every month.⁴ This is in large part due to the type of low-wage jobs that are available — many have work hours that vary significantly from week to week — or due to rigid leave policies that could cause workers to become unemployed if they developed an illness and required time off or who were unable to secure childcare and had to take time off to care for their children.³

Being poor is expensive.^5-7 Politicians who credulously spread the belief that poverty results from a poor work ethic and laziness are either oblivious to, or consciously ignore, the cost of poverty in this nation. Employment impediments continue to run rampant in a society that has to fight for employee rights. Low-income individuals continue to face racial discrimination, lack of transportation, expensive and/or non-existent childcare, unstable housing, and the overly punitive criminal justice system, which continues to punish petty crimes long after individuals have served their time. 

A more sensible view of the association between poor health and unemployment would include poverty as an impediment to a healthy diet and lifestyle. With little deductive reasoning, one might come to the conclusion that unemployment leads to poverty, which leads to poor access to high-quality primary care and preventative services. Eventually, poverty leads to poor health, which feeds back into unemployment. It is a vicious cycle. It is difficult to see how denying basic healthcare to the individuals who need it most helps promote their medical, physical, and emotional wellbeing. As Dave A. Chokshi, MD, MSc, of NYC Health + Hospitals in New York City, and colleagues, points out, the Medicaid work requirements would likely add to the administrative expenses of Medicaid while increasing the risk for eligible individuals losing their coverage due to the inevitable increase in bureaucracy.⁸

We need to stop trying to use anecdotal experiences to galvanize politics against marginalized individuals. Sure, there will be people who seek to take advantage of an honorable and generous safety-net. However, the majority of individuals seeking help are hard-working people who are experiencing economic hardship, often due to situations beyond their control. When faced with individuals in need, who are we to decide whether they’re deserving or not? We don’t stand to gain from trying — either financially or morally.

Maybe we can come together and focus our efforts and resources on offering individuals programs that help them develop new skills that will allow them to find new jobs in new niches. If CMS wants to keep people healthy and keep their costs down, the more fiscally responsible and morally acceptable approach is to help individuals find work rather than threaten to take away their healthcare when they can’t.

References

1. Bagley N. Are Medicaid work requirements legal? JAMA. 2018;319(8):763-764.
2. Goldman AL, Woolhandler S, Himmelstein DU, et al. Analysis of work requirement exemptions and Medicaid spending. JAMA Intern Med. 2018;178(11):1549-1552.
3. Silvestri DM, Holland ML, Ross JS. State-level population estimates of individuals subject to and not meeting proposed Medicaid work requirements. JAMA Intern Med. 2018;178(11):1552-1555
4. Aron-Dine A, Chaudhry R, Broaddus M. Many working people could lose health coverage due to Medicaid work requirements. Center of Budget and Policy Priorities. Published April 11, 2018. Accessed February 12, 2018.
5. Ehrenreich B. It is expensive to be poor. The Atlantic. January 13, 2014. www.theatlantic.com/business/archive/2014/01/it-is-expensive-to-be-poor/282979/. Accessed December 11, 2018.
6. It’s expensive to be poor. The Economist. September 3, 2018. https://www.economist.com/united-states/2015/09/03/its-expensive-to-be-poor. Accessed December 11, 2018.
7. Fellowes M. The high price of being poor. Brookings. July 23, 2006. https://www.brookings.edu/opinions/the-high-price-of-being-poor/. Accessed December 11, 2018.
8. Chokshi DA, Katz MH. Medicaid work requirements—English poor law revisited. JAMA Intern Med. 2018;178(11):1555-1557.

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