Vice President for Health Policy
Proposals to take Medicaid coverage away from people who don’t work or engage in work activities for a set number of hours each month will lead to large coverage losses, worse access to care, and less financial security, previous CBPP analyses showed. And they’re unlikely to advance their goal of increasing employment; in fact, they’ll likely make it harder for some people to work. Two new CBPP analyses (see here and here) show that, on top of these problems, these state proposals for waivers from federal Medicaid rules (some of which the Trump Administration has already approved) will have other, likely unintended, harmful consequences.
Many of those losing coverage will either be eligible people who lose Medicaid due to red tape or workers with unstable jobs who experience gaps in employment or can’t find enough hours of work every month.
Experience with eligibility restrictions in Medicaid and work requirements in other federal programs shows that many eligible people will lose coverage. Certain vulnerable groups are particularly ill-equipped to cope with added red tape, which is why studies have found that people with physical disabilities, mental health needs, and substance use disorders are disproportionately likely to lose benefits, even though many should qualify for exemptions.
State errors will also cause some eligible people to lose coverage. Notably, two states with newly approved waivers, Kentucky and Arkansas, have struggled to implement other recent policy and system changes, causing tens of thousands of enrollees to lose coverage.
About 60 percent of Medicaid enrollees who could be subject to work requirements under Trump Administration guidance work at some point during the year, 15 percent report they couldn’t work due to illness or disability, and another 18 percent are caregivers or in school, the Kaiser Family Foundation estimates. With large shares of workers and people with serious health needs at risk of losing coverage, the majority of enrollees at risk likely fall into one of these groups.
These proposals will also have large costs for states, the federal government, and health care providers.
As estimates from nine states implementing or considering such proposals show, projected costs are typically in the tens of millions of dollars per year, with even higher start-up costs for some states. Kentucky plans to spend $186 million in fiscal year 2018 and another $187 million in 2019 to implement its waiver. And a work requirement considered by Pennsylvania’s legislature would have cost $600 million and require 300 additional staff to administer, according to a state official. Effectively, these proposals divert some state and federal dollars from providing health care to creating new bureaucracy.