BEYOND THE NUMBERS
Lifetime Coverage Limits Have No Place in Medicaid
Arizona will soon send a proposal to the federal government to place a five-year lifetime limit on Medicaid coverage for adults under 65 who don’t have a disability. The government should reject the proposed time limit, which would lead to coverage losses and increase hardship among Arizona’s older, low-income residents.
The time limit idea comes from Arizona’s legislature, which passed legislation in 2015 directing the state to apply for an amendment to its Medicaid demonstration project, or “waiver.” The amendment includes provisions that the Obama Administration rejected when the state submitted a similar amendment a year ago because it didn’t further Medicaid’s objectives to strengthen coverage and health outcomes among low-income individuals. Along with the time limit, the latest version of the amendment includes such other previously rejected provisions as a requirement that non-disabled adults work in order to maintain coverage and coverage termination for a year for people who don’t report a change in income.
Arizona says a lifetime limit is part of its approach to encourage Medicaid enrollees to work. But ample evidence already shows that Medicaid coverage makes it easier for working-poor adults to work. For example, low-income workers in states that expanded Medicaid under the Affordable Care Act haven’t experienced greater job loss, more frequent switching of jobs, or more frequent switching from full-time to part-time work than low-income workers in non-expansion states, Indiana University researchers found. And a recent survey of Medicaid expansion enrollees in Ohio found that among those who were unemployed or looking for a job when they gained coverage, 75 percent said that having coverage made the task easier.
Over time, Arizona’s time limit proposal would hurt older state residents the most. That’s because anyone who lost a job during one or more recessions over the course of their adult life could exhaust their five-year limit on Medicaid coverage before they turn 65 and become eligible for Medicare. If they lost a job again in their near-retirement years, they’d have nowhere to turn for health coverage at a time when their health needs are greater and their cost of buying coverage in the individual market is the highest.
Arizona says it will test whether the number of adults who lose coverage due to the five-year lifetime limit “will not increase over the course of the demonstration.” But that’s a dubious hypothesis because the state is proposing to amend its current waiver, which expires on September 30, 2021 — that is, less than five years from now. Since the state says it won’t count the time a person received Medicaid before the amendment’s effective date toward the time limit, it won’t be possible for anyone to reach their five-year limit before the waiver expires.
This proposal would also place an immense and expensive administrative burden on the state. Currently, the state doesn’t track the circumstances that would exempt a person from the lifetime limit, such as employment status, receipt of disability benefits, and whether he or she is a child’s sole caregiver. To implement the time limit, Arizona would have to track all these factors on a monthly basis for each adult in its Medicaid program.
Medicaid is a critical part of the Affordable Care Act’s continuum of coverage, which provides coverage to low- and moderate-income individuals without an affordable offer of job-based coverage. Arizona’s proposal would disrupt that continuum. The federal government should once again reject the amendment.