Work Requirements in Medicaid Won’t Work. Here’s a Serious Alternative.

COMMENTARY Health Care Reform

Work Requirements in Medicaid Won’t Work. Here’s a Serious Alternative.

Mar 19, 2017 3 min read
Robert Rector

Senior Research Fellow, Center for Health and Welfare Policy

Robert is a leading authority on poverty, welfare programs, and immigration in America.
It is already difficult for able-bodied adults without dependents to get eligible for Medicaid, adding a work requirement would make registration for Medicaid even less likely. Photo: iStock

Recent reports indicate that the Trump administration and House Republicans are considering “work requirements” in Medicaid as part of their overall health care reform package.

Under the proposed policy, governors would be given the option of requiring able-bodied adults without dependent children enrolled in Medicaid to hold a job, perform community service, or undertake training as a condition of receiving Medicaid services.

While the idea of requiring work, training, or other constructive activity in exchange for benefits is sound in principle, there are numerous reasons why this policy would prove ineffective. Moreover, there are better ways to promote work in the context of the health care reform debate.

First, the proposed policy is optional; most governors will just ignore it. Second, work requirements for medical services would be almost impossible to administer and enforce. Making cash assistance or food stamps contingent on work participation is one issue, denying medical care to sick, poor people is another matter. If enacted, “work requirements” in Medicaid would certainly be symbolic rather than substantial.

In reality, it is difficult to get eligible able-bodied adults without dependent children to enroll in Medicaid. After all, they do not need to enroll in the program to receive free medical care. They know that if they get sick and walk into a clinic or emergency room they will get enrolled in Medicaid prospectively or receive treatment pro bono.

A work requirement would just make it less likely for able-bodied adults without dependent children, known as ABAWDs, to register for the program. The work requirement would reduce Medicaid enrollments, but Medicaid costs might well go up because the eligible ABAWDs would go to the emergency room rather than receive routine care elsewhere.

Also, it would be politically very difficult to enforce a work requirement for medical services. In order for a work requirement to be effective, a recipient who does not perform required activities must be denied benefits. If benefits are not denied for noncompliant behavior, the “work requirement” is empty verbiage. As noted, it is politically challenging to restrict cash and food benefits to noncompliant recipients, denying medical care to sick, poor people is another problem entirely.

Suppose a Medicaid eligible ABAWD enrolls in Medicaid and then fails to do his work assignment (a very likely outcome based on experience with other work requirements). This individual then shows up sick in the emergency room or clinic. Is the government going to deny him medical care because he did not do his workfare assignment? Of course not.

The most likely outcome of an ABAWD Medicaid work program would be the following. The income eligible ABAWD would choose not to enroll in Medicaid. When he gets sick, he goes to the clinic or emergency room. The clinic or emergency room enrolls him prospectively in Medicaid and treats him. The ABAWD is then assigned to participate in workfare/job search months in the future. He never shows up. One year later he gets sick again and goes back to the clinic and the cycle starts over.

This sudden enthusiasm for work requirements on medical care is ironic, given the fact that Republicans have largely failed, for a decade and a half, to promote serious work requirements on most cash, food, and housing welfare programs. Even the work requirements in the Temporary Assistance for Needy Families, or TANF, program, created by welfare reform in the 1990s, are more nominal than real.

If Republicans are serious about work requirements, they should start by establishing and strengthening them in cash, food, and housing programs rather than the far more daunting policy of work requirements on medical care.

Fortunately, an effective alternative policy is available. There are over 4 million ABAWDS receiving food stamps; nearly all are Medicaid eligible. These individuals receive around $200 per month in food stamp benefits. Few work.

There is a large overlap between the nonworking ABAWD population in Medicaid and ABAWDs on food stamps. In fact, the two groups are probably identical. Nearly all nonworking ABAWDs on Medicaid will also receive food stamps.

While work requirements in Medicaid would be theoretical and symbolic, a serious work requirement for ABAWDs receiving food stamps has already been implemented with great success.

In 2014, Maine implemented work requirements on ABAWDs in the state’s food stamp program. Recipients were not cut off the rolls but were required to undertake training or engage in six hours of community service per week in exchange for their benefits. Within three months the Maine food stamp ABAWD caseload dropped 80 percent. Recipients simply chose to forgo benefits rather than to perform the small amount of community service.

Maine has shown that an ABAWD work requirement in food stamps is easy to implement, causes an immediate dramatic drop in caseloads, and is politically attractive. If Maine-style work requirements were implemented for the nationwide ABAWD food stamp caseload, similar declines in the national caseload would occur. Savings to the taxpayer would come to around $10 billion per year or $100 billion over the next decade.

Congress faces a choice between an optional, nonenforceable work requirement on medical care provided to nonworking ABAWDs and a mandatory, enforceable work requirement on the food stamp benefits received by this same group.

The former policy is empty symbolism that will accomplish nothing; the latter is an effective, proven policy that will change welfare and save the taxpayers $100 billion. It is a choice between hollow talking points and actual, productive policy change.

This piece originally appeared in The Daily Signal

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