Five Reasons Medicaid Work Requirements Don’t Work

The idea of creating work requirements for Medicaid eligibility, which is a centerpiece of the Trump administration’s Medicaid policy proposals, is really just a new twist on an idea that dates back a half a century.

When President Nixon first discussed “workfare” in 1969, the idea was to instill accountability into welfare programs that many Americans had grown to distrust. While the early attempts at workfare were not a success, work requirements have been implemented and demonstrated some success – at least those that put the proper supports in place – at helping to get people on public assistance back to work.

So why would not the same be true for Medicaid, a public assistance program that provides health care for low income people?

The cost of Medicaid has risen fast because many more people became eligible for the program under the Affordable Care Act. Here are five reasons work requirements for Medicaid will not be an effective solution for the ballooning cost of Medicaid, which is what is driving the Trump administration initiative.

1) Work requirements are not necessary. According to Health Affairs, 87 percent of able-bodied adults in the Medicaid expansion population nationally – those people who became eligible for Medicaid as a result of the ACA – are working. This begs the question: what problem are we trying to solve? Designing public policy solutions to address only a minority or fraction of those covered seems neither sensible nor fair.

2) “Able-bodied” is not a clinical definition. Proponents of a Medicaid work requirement state that the proposal would only affect those who are able-bodied. This belies one of the most important facts of the Medicaid population: There are many people on Medicaid who are not disabled but would be without the Medicaid coverage they receive. Access to primary care, diagnostic tests and prescription medication enables people with chronic conditions to live free of a disability determination. Medicaid keeps people working; if that support is removed, many people will go from “able-bodied” to disabled very quickly. The result for government could be far costlier than what we have now.

3) Many people with disabilities are not defined as such by the government. It is not easy to have the federal government define you as disabled. I know, because my company does this work – we help people with disabilities get the benefits to which they are entitled. But without the help of a company such as ours, it is very easy for an individual – particularly those without a high school diploma or who do not speak English as a first language – to not complete the process. There is much “adherence” required in the disability determination process, from getting clinical evaluations to filling out paperwork properly to sending it to the correct address, and even those who do have an education and were born here have trouble complying. These people may end up with no coverage at all, even though they are entitled to it because they are disabled.

4) The labor market cannot absorb the bulk entry of low-skilled workers. Right now our economy is strong and unemployment in most areas is relatively low. With a softer economy, people with fewer skills and less job experience will have a harder time getting employment, and the jobs may be father away. Without matching child care and transportation subsidies, those jobs become inaccessible. The cost of getting even the minority of Medicaid recipients who do not work into the labor market is significant and may very well negate any savings derived from such a requirement.

5) The administrative burden, and its related cost, is not worth the effort. Medicaid has grown mainly for one reason: Fewer than half of the private employers in the United States offered health insurance in 2015 (according to the Kaiser Family Foundation) and the ACA provided access to some of those employees to get Medicaid coverage. These people work and they want to continue to work. Medicaid, in many instances, enables them to work. By creating a solution that only pertains to a minority of those on Medicaid is to create a huge and unwieldy administrative burden for states. Additionally, some three-quarters of the people on Medicaid get their coverage through a private health plan, and if the employment verification task were to be passed off to the plans, this would place an enormous burden on them. Health plans would rather spend their time caring for their members than checking work status, according to a recent quote in Forbes Magazine from Jeff Myers, president and CEO of Medicaid Health Plans of America.

The cost of Medicaid has become burdensome and solutions are needed. And developing those solutions is not easy.  A work requirement may appear to be easy pickings, but it won’t begin to get at the ballooning cost of the program.  Even worse, however, it may actually create added cost, and it will surely create harm to many American families that are depending on it as a bridge to something better.


Gerard A. Vitti is the founder and CEO of Healthcare Financial Inc.

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