Damaging effects of Arkansas’ Medicaid work requirement are warning sign for Michigan now that Trump admin has approved waiver

For Immediate Release

Jan. 10, 2019                                                                                                     

Contact:                                                                              

Alex Rossman

arossman@mlpp.org 

517-487-5436

 LANSING—The Trump administration’s approval of a plan to allow Michigan to take away Medicaid coverage through the Healthy Michigan Plan from people who don’t work for a specified number of hours each month will lead to large coverage losses and other unintended consequences, according to a new report by the Washington, D.C.-based Center on Budget and Policy Priorities.

The more than 650,000 Michiganders with lower incomes who receive healthcare coverage through the Healthy Michigan Plan will have to comply with recently approved work requirements beginning in 2020. The report, Medicaid Work Requirements Can’t Be Fixed, examines the damage a similar policy has inflicted in Arkansas and explains why coverage loss is inevitable.

Since June, nearly 17,000 Arkansas residents have lost health coverage due to the state’s unprecedented new requirements. This amounts to nearly 22 percent of all Medicaid beneficiaries so far subject to the new policy. What’s more, the number of beneficiaries losing coverage in Arkansas far exceeds the number of beneficiaries estimated to be neither working nor eligible for exemptions. That means working people and people who should be exempt (such as people with disabilities and other serious health needs) are losing coverage because of new paperwork requirements and bureaucratic red tape.

“This is a major red alert for Michigan,” said Gilda Z. Jacobs, president and CEO of the Michigan League for Public Policy. “We’ve warned lawmakers for a year that this was a reprehensible, costly and mean-spirited policy, and now we have proof out of Arkansas. Unfortunately, the cost is a human one.”

While some Arkansans were automatically exempt from the new policy, more than half of those who had to report exemptions or work hours under the new requirement failed to do so and lost coverage. Moreover, the work requirement isn’t promoting employment, despite proponents’ claims to the contrary. Rather, it’s causing some working people to lose coverage, making it harder for people with chronic conditions to get the medications and other healthcare they need to work.

Any work requirement will have these unintended consequences of taking coverage away from people who are already working or should be exempt due to illness, disability or other factors.

As Arkansas’ example shows, complex rules for reporting and claiming exemptions increase paperwork and red tape, which cause eligible people to lose coverage and become uninsured. In addition, working Medicaid beneficiaries often have low-wage jobs with volatile hours and little flexibility, so they may not be able to work a set number of hours each month—meaning that even people strongly attached to the labor force will lose coverage. Among working people with low incomes who could be subject to Medicaid work requirements, almost half would fail to meet an 80 hour-per-month requirement.

“A lot of folks are working, but they’re in jobs that don’t have consistent hours. In the service industry for example—especially in northern Michigan during the off-season—people often have volatile schedules that are dependent on forces outside their control. Now they could lose access to healthcare when they’re doing everything they can to work. It’s a shortsighted plan that’s going to cost Michigan in the long run,” Jacobs said.

What’s worse is that Michigan’s work requirement law goes a step further, not only making enrollees of the Healthy Michigan Plan jump through the hoops of applying for exemptions and dealing with hastily-created systems, but also imposing premium hikes. This is the first time a premium of that amount has ever been approved by the federal Centers for Medicare and Medicaid Services and could result in other states asking for similar rates.

“This is something not enough people are talking about, and it could impact what happens in other states. It’s disturbing that the financial requirement of a 5 percent premium will now burden people in Michigan who are already struggling to put food on the table and a roof over their heads,” Jacobs said.

Now that Michigan’s work requirement law has been approved by the federal government, the state must avoid going the way of Arkansas and systems must be put in place to help the affected populations with child care, job training, transportation and navigation of any required technology. The state must also work closely with its partners around the state to educate enrollees on the new requirements set to begin January 1, 2020.

The nonpartisan Medicaid and CHIP Payment and Access Commission (MACPAC) sent an unprecedented letter to the Trump administration recommending that it act immediately to prevent any more people in Arkansas from losing health coverage as well as halting any further approval work requirements in other states.

“I don’t want to believe it’s too late for Michigan to fix this. The League and others are doing our best to make sure this policy harms as few people as possible,” Jacobs said.

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The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.