Politico last week reported on the broken-record story of Republican governors and lawmakers expressing interest in some form of work requirements for Medicaid beneficiaries. There are still 21 states that have refused the federal money to expand the Medicaid program, leaving millions without insurance. The Obama administration has shown some flexibility in negotiating with red states (for example, the privatized version of Medicaid expansion, the “private option,” in Arkansas). But the administration has drawn a clear line in the sand on work requirements. Medicaid is a health-care program, and in addition to adding bureaucratic complexity and administrative burden to the program, a work requirement could threaten access to care for vulnerable beneficiaries.
Gov. Asa Hutchinson is featured prominently in the Politico story, and for good reason: Hutchinson is counting on his legislative task force to come up with a way to continue coverage for 230,000 Arkansans in a manner acceptable to the Obamacare-hating Tea Partiers, or at least enough of them to form a supermajority. The only way to keep that coverage is to accept the billions in federal Obamacare money that funds it, leaving the task force in a tricky spot. Work-related programs would probably be the sort of thing Hutchinson and co. could sell as a real substantive change to the private option. Keep in mind, the aginners are split between a faction who simply opposes this safety net spending on poor people altogether and those who want to see coverage continue but are squeamish about the O-word. If some version of the private option is to continue, Republican legislators need cover.
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Hutchinson told Politico:
This is supposed to be an incentive and encouragement for people to work versus an incentive for people to just receive the government benefit and not be part of a working culture of Arkansas.
The words “incentive and encouragement” are key. If Republicans demand a work requirement, that’s as good as a poison pill: it’s not going to happen. (You can similarly ignore fantasies of block granting the Medicaid program in Arkansas; the feds are not going to do this and Arkansas is dependent on the federal money, so it’s DOA.) But the feds have shown openness to programs designed to encourage work. In a letter to state officials in Utah, the feds made clear that work requirements are a no-go — you can’t make Medicaid coverage dependent on having a job. However, they also said that “encouraging work is a legitimate state objective.”
This is the space where Hutchinson and the task force could get creative, seeking to nudge or incentivize beneficiaries toward seeking employment, work programs, job training (without threatening the health care access they are guaranteed by Medicaid). Perhaps beneficiaries could save on cost-sharing if they participated in jobs programs. In some cases work requirements are allowed for SNAP (food stamps); since many private option beneficiaries are also SNAP beneficiaries, one possibility is work requirements for SNAP dovetailing with work encouragement/training in the private option.
Typically, the effort to stuff Republican talking points into the box of Medicaid rules ends up making the program more complicated, bureaucratic, and even expensive. That said, there is some promise in this idea if the state is actually willing to invest in outreach and training: in many cases, low-income Arkansans aren’t aware of existing state resources for workforce training. A work encouragement or incentives program that identified low-income people interested in job training or job programs and helped connect them to available resources could be a positive ancillary benefit for beneficiaries.
The truth is that a workforce development program grafted on to the private option would be a small tweak to a big policy, and might not accomplish much more than making poor beneficiaries jump through additional bureaucratic hoops — but it’s the sort of tweak that might be sellable as an Asacare “replacement” of the private option. As for work requirements, the Obama administration is not going to allow Arkansas or any other state to deny someone Medicaid health coverage because they don’t have a job, so the task force should abandon that pipe dream.
A little context on Medicaid and work from Politico:
Most potential Medicaid recipients already work – about 57 percent, according to a 2014 Kaiser Family Foundation study. Of those who don’t work, about a third said they were taking care of a home or family member, 20 percent were looking for work, and 17 percent were mentally ill or disabled.
That‘s not much lower than the national labor force participation rate of nearly 63 percent as of February 2015.