A Warning From Indiana: Beware of Medicaid Work Requirements

by Fran Quigley, Indiana University School of Law

February 27, 2018

The Trump administration recently approved plans to impose work requirements on people relying on Medicaid in Kentucky and Indiana and seems poised to do the same for at least eight other states. Based on my experiences as an attorney and law professor representing low-income clients in Indiana, I can assure you that many people will fall through the cracks.

This is a significant change from the way the Medicaid program has been run for decades. But opposition to work demands is “a tragic example of the soft bigotry of low expectations consistently espoused by the prior (Obama) administration,” says Seema Verma, Trump’s administrator of the Center for Medicare and Medicaid Services.

At first glance, Ms. Verma seems to have a point. Working provides benefits to both individuals and society as a whole. What is wrong with requiring Medicaid enrollees to work, especially given that there are plans to create exceptions for people with disabilities or family caregiving obligations?

In fact, it is clear that the work requirement will not impose a hardship on the majority of Americans who rely on Medicaid. Most of those who can work already do. Many who are unable to work have been officially designated as disabled and should be able to receive exemptions from work requirements.

But, based on my experiences as an attorney and law professor representing low-income clients in Indiana, I can assure you that many people will fall through the cracks. They will not be able to find and keep sufficient employment or jump through the bureaucratic hoops set up to qualify for exemptions. They will be kicked off the only health care program they could possibly obtain. They will suffer with pain and illness unrelieved by medicines or a physician’s care. Some will die as a result.

This is a dire prediction, but I make it with the confidence that comes with witnessing people in Indiana struggle to comply with a similar experimental version of Medicaid. Indiana’s expansion of Medicaid under the Affordable Care Act, crafted by Verma and then-Governor Mike Pence, forces enrollees to commit what they called “skin in the game.” Those Medicaid enrollees must pay premiums to private health insurance companies or face a “lock out” from health care.

For the poorest residents here, those premiums are nominal. But the barriers they impose are not. In the first two years of Indiana’s new version of Medicaid, over 70,000 people were either kicked off coverage or were never able to begin due to failure to make their premium payments. Based on what we see on the front lines, these Medicaid failures are not caused by a lack of individual effort to comply with the new rules, nor by a lack of desire to have health care. Instead, we see low-income Hoosiers confused and frustrated by administrative errors and onerous paperwork requirements inconsistently applied by bureaucrats and government-contracted private insurance companies. We see young mothers in homeless shelters, workers balancing multiple low-paying jobs, and overwhelmed persons with disabilities all forced to watch their health coverage disappear.

Many Who Should Receive Work Exemptions Won’t Get Them

National-level evidence makes it clear that a Medicaid work requirement will trigger the same kind of harmful impact that we see in Indiana. Persons on Medicaid who are not working are quite often living with significant disabilities. But research by the Kaiser Family Foundation estimates that more than half of those disabled persons have not yet received official confirmation from the Social Security Administration of their disabled status. As a result, they are likely to struggle to obtain an exemption from work requirements.

Among those current Medicaid enrollees who work part-time, nearly half cannot work more hours. They have family or school obligations that prevent them from working full-time or are unable to find more work in communities where available jobs are often tied to inconsistent hours and low pay. (The Trump administration says that states cannot use Medicaid funds to create programs to help provide work supports like training, child care, and transportation.) Millions of others are caregivers for elderly or disabled family members. In theory, caregivers should qualify for work requirement exemptions, but it is unclear how such exemptions will be defined and applied.

What is quite clear, based on these numbers and our own experience in Indiana, is that many persons who deserve exemptions from work requirements will fail to successfully navigate the process. They will lose their access to health care. Worse, their path back to coverage will be made intentionally difficult: states are likely to follow Indiana’s lead in creating punitive “lock out” periods, during which those who fail to comply with new rules will be barred from re-enrolling in Medicaid, no matter how much they need care.

A Sneak Attack on the Affordable Care Act?

The cruel irony of the Trump administration plans is that imposing Medicaid work requirements will likely undermine the stated goals for the new rules. As the documented outcomes of the Affordable Care Act show, people who obtain health care are more able to seek and maintain employment and are less likely to have unmet medical needs that mushroom into crises that require expensive hospital treatment.

This suggests that the true motivations behind the Medicaid work requirements are not the ones publicly acknowledged. President Trump has been quite open about his desire to destroy the Affordable Care Act. Spirited public opposition fought off his efforts to convince Congress to repeal the ACA. But Trump and his administration realize that Medicaid work requirements will achieve many of their aims and will do so outside of the bright lights of Congressional and popular scrutiny.

Consider that the first approved Medicaid work requirement was in Kentucky, where expansion of coverage to 428,000 people has often been cited as a signature ACA success story. Sara Rosenbaum, former chair of the Medicaid and CHIP Payment and Access Commission, recently wrote an article in Health Affairs analyzing the Kentucky work requirement plan, concluding that “its purpose is to thin the ranks” of those newly covered by the ACA.

Work requirements may be just the start of the rank-thinning efforts. The Trump administration is considering proposals to impose lifetime caps on Medicaid enrollment by individuals—regardless of how desperately they need medical attention. Also on the table: blocking hospitals from making the necessary short-term coverage decisions for patients in need of immediate care, a key gateway to Medicaid enrollment.

A lawsuit has been filed challenging the Medicaid work requirement in Kentucky, and more litigation is expected as states roll out the barriers. But such cases can be difficult for plaintiffs to win. Courts often defer to the policy choices made by elected officials in Congress and the White House.

As is often the case, advocates for social justice cannot afford to sit back and hope a judge will save the day. If we are troubled by the back-channel efforts to undermine health care for the sick and the poor, we need to let lawmakers know how we feel.

Fran Quigley directs the Health and Human Rights Clinic at Indiana University-McKinney School of Law and coordinates People of Faith for Access to Medicines. The views expressed are his own.