JAMA Forum: Work Requirements for Health Coverage

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Requiring near-poor individuals to work as a qualification for health coverage under Medicaid is gaining steam as the Trump administration and Republican-leaning states consider such a requirement in exchange for keeping their Medicaid expansion programs. Work requirements are also on the table for states that haven’t yet expanded Medicaid, as part of negotiations to get conservative legislatures on board.

Is accepting work requirements for Medicaid beneficiaries a fair trade-off for expanding Medicaid coverage in red or purple states? To even debate this question, it’s important to begin with an understanding of work requirements and how they are likely to operate.

Proponents in the Trump administration talk about work requirements as a way of lifting people out of poverty. Saying that if you can work, you must do so to qualify for Medicaid benefits, appeals to some people on the surface.

The implication is that some people with lower incomes need an incentive to work, and that access to medical services is such an incentive. This is an inference, even setting aside the moral value judgment, that is without the facts to back it up, however. The majority of Medicaid expansion beneficiaries already work in the increasing number of jobs that don’t offer benefits. Often these are in hourly-wage or seasonal jobs.

In practice, rather than increase the workforce by incentivizing lazy individuals, work requirements would harm 3 groups of people: the many who work, but can’t maintain consistent hours to meet the state’s standards; those with disabilities that aren’t recognized by the state; and many individuals who would be caught in a web of administrative paperwork under new systems being designed to monitor people’s work and other habits.

The Link Between Health and Work
There is a link between health and work, only it’s the reverse of how it is portrayed by work requirement proponents: good health allows people to be productive, and losing access to care is a way to lose one’s ability to be productive. 

Examine the life of a prototypical Medicaid expansion beneficiary—let’s say her name is Cathy—who works in a retail warehouse and is paid by the hour. She’s single and doesn’t receive health benefits through her job, but when her state expanded Medicaid, she received health coverage for the first time. Her work is seasonal and is managed by her supervisor so as not to exceed the number of hours that would require the company to give her benefits.

Even so, for Cathy to work as many hours as possible, she often must swap shifts with other workers and take night shifts. Her hours can decrease for any one of a number of reasons. Some reasons are related to work, as lighter demand in the summer means fewer shifts are available. Some are related to her life circumstances. People closer to the poverty level have fewer options when the normal things in life happen: their car breaks down, their child or parent becomes ill, they get the flu, or they encounter dozens of other things that are more manageable for people who are firmly in the middle class.

For any of those reasons, if Cathy is in a state with a work requirement, she can easily become ineligible for Medicaid. Even if none of those things happen, she could also lose coverage if she fails to report the changes in her hours and even be locked out of coverage for 6 months. And this is where a downward spiral begins.

When Cathy loses access to Medicaid, it is especially concerning for her. She has a history of depression, and Medicaid allows her to get treated with medication, which has helped her manage her condition and allowed her to work. For people with low incomes, depression without access to Medicaid often means depression without access to antidepressant medication.

Loss of Coverage
Cathy, and millions like her, want to work, and Medicaid allowed her to do that. Medicaid with a work requirement, however, made that impossible. Roughly half of low-income working women who are potentially subject to Medicaid work requirements could lose coverage if they don’t meet a requirement of working 80 hours per month (typical in most proposals). So it’s no surprise that all of the states that put forward work requirement proposals are projecting that tens of thousands will lose coverage. If work requirements were adopted nationally, coverage losses would run into the millions.

What about exemptions? It’s true that many current and proposed work requirement programs have various exclusions, including one designed to exclude people with disabilities. But 60% of people who meet the common definition of being disabled don’t qualify, as they don’t meet state Supplemental Security Income definitions. Cathy’s history of depression would be unlikely to meet this definition.

Some states with work participation requirements allow people who don’t work enough hours to participate in volunteer programs to gain access to Medicaid. In real life, when this is offered, it amounts to preventing someone from seeing a doctor or dentist or getting their medication until they work enough hours picking up trash by the side of a highway—presuming they have the stamina for the task.

Medicaid’s purpose is to pay for people’s medical care when they’re sick and to help keep them well, not to enforce employment. For that reason, a judge last month blocked Medicaid work requirements from taking effect in Kentucky, the first state to receive a waiver from the Trump administration to allow their implementation. But even in the midst of this legal ruling, other states were still planning to move forward.

For states like North Carolina or Kansas that are considering Medicaid expansion but for which work requirements are necessary for the legislature to pass it, is the incremental coverage gain worth it? Some coverage advocates say yes, but others believe it will be a step backward. A better answer can actually be found in Montana.

Montana, which has a Democratic governor, a Republican legislature, and a frontier culture, found a solution that works well for everyone. Instead of a work requirement, they introduced a new set of job training resources. These gave people gaining health coverage through expanded Medicaid the opportunity to meet with a labor specialist to help them with job placement and advancement, including tips for improving their skills and income. Rather than invest in an expensive and intrusive monitoring system, like Kentucky did, Montana, in a bill written by a Republican state senator and signed by Democratic Gov Steve Bullock, made their investments in resources to help people work.

The work requirement standoff may end up settled by the courts. But that won’t make the issue go away. And in the event that it doesn’t, simply saying that work requirements are immoral and infringe on people’s rights or that they are necessary incentives for those not inclined to work isn’t going to persuade people of differing views on how to move forward.

Understanding how these requirements work in real life allows us to reach forward with solutions like Montana’s. Good policy in this day and age represents quite an achievement; good policy that helps create a common understanding out of differing views is an achievement that can be built on.

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About the author: Andy Slavitt, MBA, served as the Acting Administrator for the Centers for Medicare & Medicaid Services under President Obama from 2015 to 2017, where he focused on advances in health care coverage and accelerating health care delivery system transformation. He has 2 decades of private–sector health care leadership, both as a senior executive at Optum, a health services and innovation company, and as an entrepreneur. He tweets at @aslavitt. (Image: US Department of Health and Human Services)

About The JAMA Forum: JAMA has assembled a team of leading scholars, including health economists, health policy experts, and legal scholars, to provide expert commentary and insight into news that involves the intersection of health policy and politics, economics, and the law. Each JAMA Forum entry expresses the opinions of the author but does not necessarily reflect the views or opinions of JAMA, the editorial staff, or the American Medical Association. More information is available here and here.

 



Categories: Caring for the Uninsured and Underinsured, Health Policy, The JAMA Forum

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