We know Medicaid work requirements won’t work

This column originally appeared in Michigan Advance on December 7, 2019

Punitive and problematic Healthy Michigan Plan work requirements are set to take effect on Jan. 1, putting the health care it provides for over a half-million residents in jeopardy.

And while lawmakers continue to ignore concerns from Healthy Michigan Plan enrollees, medical professionals, state and national health advocates, and Gov. Gretchen Whitmer, the lack of legislative recourse has led to the pursuit of legal recourse instead.

The Healthy Michigan Plan is Michigan’s Medicaid expansion program, and it has allowed more than 650,000 residents to gain access to comprehensive health benefits. The program has also been a boost to the state’s economy, generating approximately 30,000 new jobs every year and millions of dollars in income and sales tax revenue annually for the state.

However, the success of Healthy Michigan may be jeopardized by a forthcoming work requirement law. This state law, which was signed by now-former Gov. Rick Snyder, makes reporting work or qualifying activities a condition for Healthy Michigan Plan eligibility.

On Jan. 1, individuals enrolled in Healthy Michigan who are unable to obtain an exemption or who do not report at least 80 hours of work per month will lose their coverage. (Enrollees are allowed three “non-reporting” months before their coverage is terminated.)

If the honest goal of the Healthy Michigan Plan work requirement is to promote work among enrollees, we know there are much more effective ways to do so. Efforts to improve access to affordable child care or increase the state’s Earned Income Tax Credit (EITC) are likely to do significantly more to encourage workforce participation than mandating work by threatening health care coverage.

But while its so-called benefits as a work incentive are unclear, a primary concern of this law is the likelihood that it will lead to lost coverage for tens of thousands of Healthy Michigan Plan enrollees. Luckily, a handful of organizations are standing up for these residents and seeking to stop the work requirements law before it starts.

The week before Thanksgiving, the Center for Civil Justice, Michigan Poverty Law Program and National Health Law Program announced a lawsuit against the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services.

The complaint argues that the 1115 Medicaid demonstration waiver that allowed Michigan to add work requirements as a condition of Healthy Michigan Plan eligibility and make changes to healthy behavior and premium requirements should never have been approved. Demonstration waivers are intended to promote innovation and improve Medicaid programs, but the complaint asserts that work requirements do neither and instead thwart individuals’ ability to access high-quality, person-centered care — a primary objective of Medicaid.

The lawsuit, filed on Nov. 22, is the fifth of its kind. Complaints from Kentucky, Arkansas, New Hampshire and Indiana were filed prior.

States that have introduced similar Medicaid work rules have experienced challenges (and high costs) to implementing such policies and, perhaps most importantly, struggled to maintain enrollment levels. In Arkansas, for example, in the first six months following the state’s implementation of a Medicaid work requirement, approximately 17,000 enrollees lost their health insurance coverage.

Research found that many enrollees subject to the work mandate were unaware of the policy change or faced barriers to complying with the administrative hurdles of reporting. Data also found that Arkansas’ Medicaid work rule had no significant impact on workforce participation. Likely, in part, because the vast majority of enrollees were already working. (About half of all the people enrolled in Michigan’s Medicaid expansion program are working.) Coverage losses were thus not a result of failing to work but pervasive challenges in reporting work hours.

Study findings also contradicted the assertion that those removed from Medicaid would move onto private or employer-sponsored coverage. Instead, data indicated that the work rule lead to an increase in the Arkansas’s uninsured rate. And uninsured rates matter because individuals without health insurance are less likely to receive necessary health care and access the prescriptions they rely on. For those without insurance who still receive the health services they need, costs are often much greater.

Michigan residents, including plaintiffs in the most recent work requirement lawsuit, are right to be concerned that the Healthy Michigan work requirement will lead to similar difficulties and coverage losses.

Almost every other state pursuing Medicaid work requirements has suspended or delayed them — either as a direct result of litigation or as a way to avoid it.

With a lawsuit now filed in Michigan, the state is poised to spend millions of dollars to implement a potentially illegal law. Outside of the courts, only the Michigan Legislature can delay this law. We sincerely hope our state leaders will take the concerns outlined in the suit to heart and reconsider moving forward with the Healthy Michigan work requirement.

For more information related to Medicaid work requirements, visit this resource page.