Republicans Imposed Medicaid Work Requirements; Governor Wants to Undo Them

Michigan’s new Democratic governor is trying to reverse course on steps taken by her Republican predecessor to require childless, able-bodied beneficiaries of the Obamacare Medicaid expansion to meet work, training or community service requirements. In a February letter to the federal administrator of the program, Gov. Gretchen Whitmer called the work requirements “onerous.”

In the letter, Whitmer cited an analysis by the Manatt law firm, which predicted that Michigan’s new Medicaid work requirements would cause 61,000 to 183,000 people to lose their health coverage over the course of a year. That’s a much larger estimate than was reached by the state’s House Fiscal Agency, which predicted that between 27,000 and 54,000 would be disenrolled. The requirements, which go into effect Jan. 1, 2020, apply to childless adults and some parents of children over the age of 6.

Robert Gordon, Whitmer’s choice to head the Michigan Department of Health and Human Services, alluded to the Manatt analysis in his confirmation hearings before the state Senate. The new work requirements, he said, may be overbearing. He also said that Whitmer wants to do away with monthly reporting requirements and lower the age at which people are exempted from the requirements from 62 to 50.

The Manatt analysis draws on the experience of Arkansas, and according to national experts on Medicaid and health care policy, many reasons may explain why people left Medicaid after that state implemented its work requirements.

Naomi Lopez-Bauman is the director of health care policy at the Goldwater Institute. She said in an interview that Medicaid and any work requirements connected to it can vary from state to state.

“In Arkansas, 18,000 individuals were disenrolled from Medicaid between August and December 2018,” Lopez-Bauman said. “Every single one of those individuals was eligible to reapply for coverage on Jan. 1, 2019, and fewer than 1,000 re-enrolled. Those in the higher income level of Medicaid eligibility are on and off the rolls frequently.”

Doug Badger is a senior fellow at the Galen Institute who served as a senior White House adviser in the George W. Bush administration. When so few individuals who were eligible for the Medicaid expansion in Arkansas re-enrolled, he said, they made a rational decision that they were better off without the benefits.

“If you don’t report any work activity at all, after being told that this would cause you to lose benefits, that suggests that you don’t value the benefits very highly. This is consistent with research showing that Medicaid recipients receive about 20 to 40 cents of benefits for every dollar of Medicaid spending,” Badger said.

Lopez-Bauman also said there is a cost for the individual and that person’s community when someone who receives Medicaid-expansion benefits and is able to work does not engage with the community in some way.

She also mentioned a report from the Buckeye Institute, which found that when single individuals without children are required to work to be eligible for Medicaid, their lifetime earnings increase. Men could see their incomes increase by $323,539, while women could gain $212,694.

Lindsay Killen, vice president of strategic outreach and communications for the Mackinac Center for Public Policy, said in an email that easing Michigan’s work and community engagement requirements would have negative consequences for Medicaid’s traditional, most vulnerable population.

“The program continues to balloon in enrollment of able-bodied adults who strain state resources needed to care for expectant mothers, the disabled and the elderly,” she said.