Kentucky Medicaid Waiver Reapproval Would Hurt Wide Range of Beneficiaries

Although a federal court has rejected the Centers for Medicare & Medicaid Services’ (CMS) approval of a Kentucky Medicaid waiver that will take away people’s Medicaid coverage if they don’t work or participate in work-related activities, CMS is again considering Kentucky’s proposal. In a series of issue briefs, we’ve examined how proposals like Kentucky’s will affect various groups of beneficiaries.

• Low-wage workers. Contrary to a common misconception, work requirements won’t just hurt non-working enrollees; they’ll also likely cause many working people to lose coverage. Most adult Medicaid enrollees work, but in low-wage jobs in industries like retail, home health, and construction, which often don’t offer health benefits. These jobs are unstable: hours fluctuate from month to month, and frequent job losses leave people unable to find work in some months. Largely as a result, among low-income working adults who could be subject to Medicaid work requirements, almost half would be at risk of losing coverage under a policy like Kentucky’s, because they would fall short of the 80-hour-per-month requirement in at least one month of the year.
• Rural residents and communities. A new brief finds that rural populations depend heavily on Medicaid and would be at risk for coverage losses, reductions in access to care, and hospital closures under work requirement proposals.
• People with disabilities and serious illnesses. Millions of low-income adults with disabilities and serious illnesses get health coverage through Medicaid. Some would be excluded from work requirement policies because they receive Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI). But nearly three-fifths of all non-elderly adult Medicaid enrollees with disabilities (almost 5 million people) do not receive SSI or SSDI and would therefore be subject to these requirements — and at high risk of losing coverage and access to care — unless they could overcome the red tape to prove that they qualify for health-related exemptions. When other federal programs have imposed work requirements, people with disabilities have been disproportionately likely to lose benefits.
• Women. Nearly 40 million women get their health coverage through Medicaid, millions of whom became eligible due to the Affordable Care Act’s (ACA) expansion of Medicaid to cover more low-income adults. Policies that take Medicaid coverage away from people who aren’t working would harm many women who are caregivers for children or other family members, as well as those with disabilities or serious illnesses who may not be exempt or may struggle with the bureaucratic hurdles to secure an exemption. These policies would also harm women who work hard in low-wage jobs with inconsistent hours.
• Children. When parents have health insurance, their children are more likely to be insured, research shows. That’s a big reason why the Medicaid expansion for parents and other adults significantly increased children’s health coverage. Children also benefit from their parents’ better access to care and improved health outcomes and from their families’ increased financial security. Medicaid work requirements will likely cause many parents to lose coverage, harming their children as well.
• People experiencing homelessness. People experiencing homelessness are more likely to have a disability than the general population, but they have a harder time proving it, in part because lack of access to health care can mean they have limited medical evidence of their conditions. Now, adults in expansion states with incomes up to 138 percent of the poverty line can enroll regardless of disability, making coverage available for far more people experiencing homelessness and providing them with access to both routine and urgently needed health care. But proposals to take Medicaid coverage away from beneficiaries not meeting work requirements threaten these gains, since people experiencing homelessness face major barriers to work and will also face special challenges proving they qualify for exemptions from new requirements.
• People with mental health conditions. Medicaid is the nation’s largest payer of mental health services, providing health coverage to 27 percent of adults with a serious mental illness. Many people with a mental illness that keeps them from working on a permanent or temporary basis would be at risk of losing coverage under work requirements. Even those who are eligible for an exemption will likely have trouble proving it due to bureaucratic obstacles, which would be made even more difficult by the nature of their condition.
• People with substance use disorders. Medicaid expansion has significantly increased health coverage and access to treatment for people with substance use disorders (SUDs). In states that expanded Medicaid, the number of people hospitalized with a SUD who did not have health insurance decreased from about 20 percent in 2013 to 5 percent in 2015. But people with SUDs are at high risk of losing coverage and access to treatment under work requirement policies, especially since having a SUD may not qualify beneficiaries for health-related exemptions from these requirements.
• American Indians and Alaska Natives. Medicaid is an important source of coverage for American Indians and Alaska Natives (AI/ANs), a population that faces high unemployment and persistent health disparities, including a high uninsured rate, barriers to care, and significant physical and mental health needs. Medicaid plays a key role in addressing these challenges, especially in states with large AI/AN populations that have expanded Medicaid under the ACA. But AI/ANs have much higher unemployment rates than other residents of these states, putting them at high risk of losing coverage under work requirement policies.
• Older Americans. More than 8.5 million Americans age 50-64 get health coverage through Medicaid; expansion under the ACA helped drive a nearly 40 percent decline in uninsured rates for lower-income people age 50-64 between 2013 and 2016. Older adults face particular challenges in meeting work requirements, and the health consequences if they lose Medicaid coverage are likely to be especially severe.