The Trump administration’s decision to enable states to impose work requirements for Medicaid eligibility has proven irresistible to state leaders in Kentucky and Indiana, but other states would be wise to carefully study the potential effects first.
Once they do, they will reach the same conclusion that will eventually be reached in those two states: Medicaid work requirements do not work.
On the surface it may appear completely logical: Medicaid costs for the nation are skyrocketing and efforts must be made to contain them.
Low- and middle-income individuals who get Medicaid coverage are a soft target, particularly for a billionaire president who cannot identify with the needs of these people.
Regardless of the political backdrop, Medicaid work requirements are a non-starter for these reasons:
· They simply are not necessary and won’t generate significant savings. Eighty-seven percent of able-bodied adults who qualified under the program’s national expansion, which was part of the Affordable Care Act, already work. It begs the question: “what problem are we trying to solve?”
· Medicaid coverage prevents unemployment related to disability. The care that Medicaid-eligible individuals with chronic conditions receive in many cases enables them to work. Without this coverage, chronic conditions lead to acute illness and that can make it impossible to hold a job.
· Employment for low-skilled workers is not a given. The bustling economy has provided employment for many low-skilled workers, particularly in major metro areas. Farther outside of the city, in more rural communities and rust-belt cities, there are not adequate jobs for low-skilled workers and thus work in some cases is not an option. To remove coverage from such individuals and their families is mean-spirited. Additionally, in a softening economy, this becomes a concern everywhere – urban, rural, and everything in between. We have enjoyed dramatic economic growth since 2009 and we know the economy is cyclical.
· A paper chase for states and families. Being in the eligibility determination business, I know how paper-intensive and bureaucratic the process is to become eligible for a government health program. Work requirements will greatly increase the administrative burden felt by the federal and state governments, as well as families. Many Medicaid recipients are covered by health plans (Medicaid programs pay the premiums and the plans cover the individuals and carry the risk). This arrangement has saved a huge amount of money for taxpayers, but the Trump change undermines it. In fact, the CEO of Medicaid Health Plans of America has stated publicly that a work requirement will create an administrative burden and take resources away from caring for members, as plans will have to continuously check eligibility and shift members on and off of coverage.
Work requirements will not provide any benefit to taxpayers and will have the net effect of leaving people without coverage. Many people on Medicaid already work; a mandate will not increase the percentage that do.
There are smarter ways to cut costs. In my home state of Massachusetts, the Medicaid program is dramatically re-structuring, and expects to achieve savings by moving individuals covered by the program into Accountable Care Organizations, which will share risk and be compensated according to outcomes. The state is not imposing work requirements but will likely achieve cost savings.
Before running ahead with implementation of Medicaid work requirements, let’s hope states take the time to consider the implications and ultimately reject this federal offering.
Gerard A. Vitti is the founder and CEO of Healthcare Financial, Inc., which works with managed care organizations by assisting individuals in obtaining health care benefits.