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The Trump administration's Medicaid announcement isn't really about 'work'

The Trump administration's announcement on Thursday allowing states to tie low-income people's eligibility for Medica...

Posted: Jan 12, 2018 8:15 AM
Updated: Jan 12, 2018 8:15 AM

The Trump administration's announcement on Thursday allowing states to tie low-income people's eligibility for Medicaid to work or work-related activities isn't aimed primarily at promoting work. Don't be fooled. It's the first of several expected steps to shrink and weaken the Affordable Care Act's Medicaid expansion that provided coverage for 11 million low-income adults, with incomes up to 138% of the federal poverty line.

Soon, the administration will likely approve "waiver" proposals, starting with Kentucky and Indiana and followed by other states, to end Medicaid coverage not only for people who aren't working, but also for those who didn't pay premiums - or renew their coverage - on time.

Most Medicaid beneficiaries who can work, do work. Nearly eight in 10 adult beneficiaries who aren't disabled live in working families; most are working themselves. The vast majority of those who aren't working have an illness or disability, are caring for a family member, or are in school. So, the main impact of work requirements will be to eliminate health coverage for large numbers of low-income people, most of whom gained coverage through the Medicaid expansion - including people who are already working but don't meet state paperwork requirements and those who can't work due to illness or disability.

Although the announcement says states must protect people who can't meet a work requirement because of illness or disability, don't hold your breath. We know from experience with work requirements in Temporary Assistance for Needy Families and SNAP (formerly food stamps) that large numbers of people lost benefits because the state decided they hadn't met various paperwork requirements to show they were working or unable to work or they experienced other barriers to proving they were exempt from the requirement.

If work requirements have the same impact in Medicaid, that will weaken the Medicaid expansion, furthering a key administration goal. The Centers for Medicare & Medicaid Services administrator, Seema Verma, has said the ACA's Medicaid expansion didn't "make sense," and last year the administration and the Republican Congress failed in multiple tries to repeal it outright. This disagreement with expansion lies at the heart of the decision to allow states to make Medicaid changes that the states themselves admit will reduce coverage.

For example, studies show that charging premiums in Medicaid and the Children's Health Insurance Program reduces coverage for both children and adults: Fewer people enroll, more people leave the program, and people spend less time on the program. And the impact is greatest on people with incomes below the poverty line, who are also likeliest to become uninsured if they lose coverage. Yet the Centers for Medicare & Medicaid Services will likely soon allow Kentucky and Indiana to charge premiums to poor adults and cut off their coverage or charge them more to get care if they don't pay - and to cut them off if they're not working.

Kentucky, where the uninsured rate for low-income adults plummeted under the Medicaid expansion (from nearly 40% in 2013 to 7% at the end of 2016), estimates its proposed changes will cut enrollment by 15% in five years.

The Medicaid expansion isn't just a "hollow victory of numbers" of people covered, as Verma claims. It has improved low-income people's financial health, helped states fight the opioid epidemic, and improved access to care. It has also helped people work: Studies of Medicaid expansion in Ohio and Michigan found that the majority of beneficiaries said that getting health coverage helped them look for work or remain employed.

The administration, by encouraging states to impose changes that will eliminate coverage for large numbers of low-income residents, threatens to reverse these gains.

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