Michigan Medicaid Proposal Would Harm People in All Parts of the State

A bill before Michigan lawmakers that would take Medicaid coverage away from people who can’t meet a rigid work requirement has been rightly criticized because of a provision that would make the requirement less rigid for people in mainly white, rural areas with high unemployment than people in mainly African American, urban areas with equally high unemployment. But that provision would only apply to a small share of those subject to the work requirement, so the bill as a whole would cause large coverage losses in all parts of the state, including high-unemployment counties. Potential changes in this or other parts of the bill wouldn’t meaningfully lessen its harmful impacts, which include less access to health care, higher uncompensated care burdens for Michigan hospitals, and large new administrative costs for the state.

Put simply, the Michigan bill is unfixable and jeopardizes the state’s coverage gains from its “Healthy Michigan” Medicaid expansion under the Affordable Care Act.

The uninsured rate among non-elderly Michiganders has dropped 50 percent since the state implemented Healthy Michigan in 2014. And it’s fallen in every part of the state, with every county except one seeing a drop of at least 40 percent. (For county-specific data, select “Change in uninsured rate” on the map below, which my colleagues Matt Broaddus and Nick Kasprak created.) Wayne County (which includes Detroit) has seen a 55 percent drop, for example, while rural Alpena and Gogebic counties have seen drops of 56 and 52 percent, respectively.

A bill that the Michigan Senate passed in April would require nearly 1 million people, or about 15 percent of the state’s non-elderly adults, to work at least 29 hours a week on average every month unless they meet a narrow list of exemptions. The policy would apply to 24 percent of non-elderly adults in Wayne County and about 17 percent in Alpena and Gogebic counties. (Select “Medicaid enrollees who would lose coverage for failing to meet work requirements” on the map.) Up to 105,000 Michiganders would lose their Medicaid coverage, the Michigan House Fiscal Agency projects, and most of them would likely become uninsured.

The bill lets residents in counties with unemployment above 8.5 percent meet the requirement by looking for a job. But this modified requirement would apply to only about 3 percent of those facing the work requirement, or roughly 30,000 people, we calculate using Bureau of Labor Statistics unemployment data for March 2018. So, while the 17 counties that meet the high-unemployment criterion are overwhelmingly white (89 percent of residents are white; fewer than 1 percent are African American), the large majority of white and rural Michiganders would remain subject to the full requirement and at high risk of losing coverage. Moreover, coverage losses could also occur in the 17 high-unemployment counties, since some people wouldn’t be able to meet the modified requirement.

The bill’s supporters say they may change the unemployment trigger provision or make other changes, such as lowering the weekly work requirement or creating new exemptions. But any bill that retains the Senate bill’s core structure — in which people lose coverage if they don’t complete and document work activities every month — would have the same harmful impacts, as we’ve explained. Notably, Kentucky’s work requirement proposal (the first that the Trump Administration approved) has a lower weekly requirement than Michigan’s and a broader set of exemptions, and it allows a broader set of activities to count toward the requirement, yet Kentucky projects a 15 percent drop in Medicaid enrollment once it’s fully phased in.

Rather than trying to fix an unfixable bill, Michigan policymakers should reject any proposal that threatens the success of Healthy Michigan by taking away people’s coverage if they can’t meet a new work requirement.