State, advocates disagree
South Carolina is one of more than a dozen states that have taken the Trump Administration up on its invitation to make working a condition of getting Medicaid.
Proponents say it will improve the health, employment and incomes of beneficiaries, while critics say the documentation burdens and other barriers to holding a job — like child care expenses — will wind up leaving many without health coverage.
If approved, state residents would have to work, volunteer or attend school for 80 hours a month to receive Medicaid benefits.
But according to a recent Commonwealth Fund report, at least 589,000 to 811,000 people in the nine states whose work requirements have already been approved would lose Medicaid coverage if the proposals are allowed to proceed.
In Arkansas alone, some 18,000 people were cut from the Medicaid rolls for noncompliance — even working and exempt beneficiaries — and many didn’t know about the new requirement, according to the nonprofit health research group.
Another seven states, including South Carolina, have requests pending with the federal government.
1 in 5 South Carolinians
The state Department of Health and Human Services proposed the work requirement because Gov. Henry McMaster “believes strongly that individuals who have the ability to seek skills or find employment or engage in other activities should do so,” said Joshua D. Baker, the agency’s director.
Nationally, more than 65 million Americans are covered by Medicaid.
In South Carolina, Medicaid covers about 1.06 million people — or one in five residents, according to DHHS, which administers the program.
Most — 654,958 — are low-income children and the rest are largely elderly nursing home residents or people with disabilities, the agency reports.
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Exempt from the work proposal, among others, are children, pregnant women, disabled people, the primary caregiver of a child or someone who is disabled, those over 65, and those on Social Security Disability Insurance or Supplemental Security Income.
Child care, transportation and other barriers to work
So while about 180,000 people might qualify for the work requirement, most would get an exemption, leaving about 7,100 — or fewer than 1 percent of enrollees — required to work, the agency reports.
But Sue Berkowitz, executive director of the South Carolina Appleseed Legal Justice Center, said a work requirement would harm low-income parents by requiring a lot of red tape to prove they meet the guidelines or risk losing coverage.
Especially hard hit would be poor parents in rural areas where jobs are hard to find, and where the cost of child care and transportation make it difficult to accept a low-paying job, she said.
Social and economic challenges
Nationwide, 63% of adults on Medicaid are already working, according to the nonprofit Kaiser Family Foundation.
In the Palmetto State, most people covered by Medicaid already have at least one working person in the family, said Shelli Quenga of the nonprofit Palmetto Project, which looks for solutions to South Carolina’s social and economic challenges.
“Additional bureaucratic application and verification processes will add unnecessary barriers to those … in our community who are least capable of advocating for themselves to achieve coverage,” she said.
And Eliot Fishman, senior director of health policy for the nonprofit health advocacy group Families USA, said many people required to do the documentation don’t realize they have to.
“You have to get a mailing … and that requires the department to have a correct address for them, which in many cases they don’t have,” he said.
Communicating the requirement
Evidence from Arkansas showed that the work requirement actually resulted in declining employment as well as lost coverage, Fishman said.
“So in addition to throwing people off the Medicaid roles, the proposals don’t work for their stated purpose, which is to increase employment,” he said.
Baker argues that the requirement won’t make reporting too burdensome. Other parts of the program look at assets, such as nursing home admission, without a significantly higher reporting burden, he said.
He added that because most people on Medicaid must engage in periodic renewal, they are aware of the requirements. Still, DHHS also will communicate the requirements to enrollees via email, phone and managed care plans, he said.
Administrative costs and burdens
Berkowitz said the work requirement also would saddle taxpayers with the additional administrative costs to run the program.
Baker said DHHS is committed to minimizing administrative burden. For example, he said, those who don’t comply with the work requirement would be suspended, not cut, from Medicaid while DHHS helps them to comply.
But Quenga said the requirement and its associated costs will do nothing to create jobs in economically depressed communities, increase job training opportunities or expand access to quality child care.
Baker said DHHS plans to connect people with existing resources to help them go to work or school, through state or educational institutions, subsidized transportation, or another program. And while there may be some expense in data sharing, DHHS will use existing data and relationships wherever possible, he said.
The Commonwealth Fund reports that in Arkansas, Medicaid work requirements didn’t result in increased employment.
In a May letter to U.S. Health and Human Services Secretary Alex Azar, Baker wrote that DHHS expects the work requirement will move enrollees from Medicaid to other insurers, “while recognizing that a person who is penalized for finding work by losing their health coverage may choose to remain unemployed.”
But Berkowitz said most jobs available to beneficiaries are very low-income and don’t offer insurance. The best option for South Carolina would be to expand Medicaid under the Affordable Care Act, resulting in a higher federal match and lower administrative costs, she said.
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