Working people could still lose health coverage under Medicaid work requirements

People who work might still be at serious risk of losing their health insurance under new Medicaid work requirements being pushed by the Trump administration, according to a new analysis.

The left-leaning Center on Budget and Policy Priorities examined state proposals to require Medicaid to prove they are employed. It came to a startling conclusion: Under these plans, even poorer people on Medicaid who are working regularly might not meet the strict requirements placed on them and could suffer a lapse in health coverage as a result.

That’s because people working lower-wage jobs are more likely to have irregular working hours or gaps in their employment. By CBPP’s estimate, one in four people who worked enough hours over the course of a year to meet Kentucky’s work requirement are still estimated to have at least one month where they fall below the state’s 80-hour monthly requirement, and could therefore be at risk of losing coverage.

In other words: A Medicaid work requirement could force working people to lose their health insurance because it isn’t structured to reflect the realities of what work looks like for people with lower incomes.

“Even people ... who are highly motivated to find and maintain employment, will often experience periods during the year when they are not working or are not working enough hours to meet state work requirements,” CBPP’s experts wrote.

So far, the Trump administration has approved Medicaid work requirements in three states: Kentucky, Arkansas, and Indiana. Several other states have proposals pending with the Centers for Medicare and Medicaid Services. CBPP focused on Kentucky, using the logic that the Bluegrass State’s proposal was the first one approved and seemed pretty average: not too harsh, not too lenient, when compared with other states.

As we’ve covered before, many people on Medicaid — those with federally qualifying disabilities, the elderly, children, pregnant women — would not be subject to these work requirements. The rest of them are generally already working: CBPP reported, using census data, that two-thirds of people potentially subject to a work requirement were working and 70 percent of those worked 1,000 hours over a year, which comes out to 80 hours a month, Kentucky’s threshold for meeting its work requirement.

But just because you work enough in the aggregate doesn’t mean you work enough on a month-by-month basis to satisfy a Medicaid work requirement. CBPP found that nearly half of people (46 percent) who could be subject to a work requirement and were working had at least one month when they failed to clear Kentucky’s 80-hour bar.

A quick note on the methodology: CBPP had to use 2012 to 2013 census data to track month-by-month variations in income, but when it applied more general 2016 data, it found similar trends. You should read the report for a closer look at how it came up with the findings.

Lower-wage jobs tend to be more volatile, with fewer regular hours. Top industries for people who are likely to face a work requirement are food services, retail, and construction, according to CBPP — jobs that can be subject to seasonal and other shift changes.

Seven in 10 food service workers report that they work irregular hours, according to CBPP; 63 percent of retail workers said the same, along with 54 percent of construction workers. All three industries have above-average rates of people quitting or being laid off; retail and food services have some of the shortest average job tenures.

“Approved and pending state work requirement policies are based on the assumption that people who want to work can find steady employment at regular hours,” the CBPP authors wrote. “This assumption is out of step with the realities of the low-wage labor market.”

The other problem with Medicaid work requirements, CBPP noted, is the paperwork required to satisfy them. Working people who are doing what is asked of them under these requirements could still lose coverage if they fail to file the proper paperwork or if the state mismanages the forms they do file.

States know work requirements are a major administrative lift: The Tennessee legislature is actually debating right now whether to take money from Temporary Assistance for Needy Families, the federal cash welfare program, and use it to pay for the administrative costs of setting up a Medicaid work requirement.

Even if states try to simplify it — by putting the forms online, perhaps, — CBPP noted that 19 percent of Kentucky Medicaid enrollees who could be subject to a work requirement don’t have internet access and 42 percent don’t have access to broadband internet. These are people who will struggle to clear such bureaucratic hurdles.

And then you’re left with the fact that, as CBPP concludes, losing health coverage could then actually make it harder for these people to get back to work. We have evidence from Michigan and its Medicaid expansion that many people who are working while on its rolls have serious physical and mental health problems that could become worse if they lose their health insurance, which would in turn make it more difficult for them to work. People on Medicaid have also reported that the program’s coverage makes it easier for them to work.

“In states with work requirements, some workers who lose their jobs due to health setbacks may then lose their health coverage and access to treatment as well, which would make it far harder for them to regain their health and their employment,” the report’s authors wrote.

In summary: Most Medicaid enrollees who face a work requirement are already working, but because of the nature of their jobs or administrative snafus, they could still lose coverage. If they do, the loss of health coverage could then make it harder for them to get back to work.

This is a big reason why Medicaid work requirements are such a concern to people who have overseen the program before.

“In real life, what I think is most concerning is it will lead to losses of coverage, and that is not what the Medicaid program is supposed to be doing,” Cindy Mann, who oversaw Medicaid under President Barack Obama, told me recently. “It’s supposed to be promoting coverage and promoting affordable coverage.”