Medicaid work requirements plan worries providers

Medicaid work requirements are back on the table, raising concerns among healthcare providers about the consequences of removing millions of low-income people from the program rolls, likely leaving many uninsured and unable to pay their bills.

House Republicans revived this debate as they try to force President Joe Biden to concede on policy issues in exchange for their support raising the federal government's debt ceiling and avoiding a global financial crisis. Biden strongly opposes Medicaid work requirements and last year unwound efforts by President Donald Trump's administration to carry them out. The GOP-controlled House, on a strictly party-line vote, passed a bill including the work rules last month.

More uncompensated care would burden providers that already face financially difficult circumstances, said Laura Appel, executive vice president of government and policy at Michigan Health and Hospital Association. The American Medical Association opposes Medicaid work requirements and the Ohio Hospital Association is concerned about how such policies would affect access to care.

“The Ohio Hospital Association understands government's aim of promoting financial independence and preparing Medicaid beneficiaries to transition to commercial insurance, but this effort should not interrupt access to care,” a spokesperson said in a statement. “Anything that disrupts coverage ultimately disrupts access, and we want to assure that beneficiaries are not in constant transition, on and off the program, which would ultimately add confusion, complexity and cost to the system.”

The plan from House Speaker Kevin McCarthy (R-Calif.) would require certain Medicaid enrollees to prove they are working, in job training or partaking in community service at least 80 hours per month. The rules would apply to those 19-55 years old who do not receive disability benefits. The policy includes exemptions, such as students in school at least half the time, pregnant people, those who are medically frail and those who take care of children or incapacitated adults.

The Trump administration approved Medicaid work requirements in 13 states and others had applications pending when federal judges struck down the rules as incompatible with Medicaid's statutory mission to provide health coverage to low-income people. Arkansas was the lone state to carry out the policy before the courts acted, and about one-quarter of Medicaid enrollees subject to work requirements, or more than 18,000 people, lost benefits and employment didn't rise.

The Health and Human Services Department estimates the proposed federal work requirements would apply to more than 21 million people. The Congressional Budget Offices projects that 1.5 million would lose Medicaid, 600,000 of whom would become uninsured.

The Biden administration objects to the House-passed proposal, a senior Centers for Medicare and Medicaid Services official told reporters last week.

"We think that the work reporting requirements—really any form of it—will simply lead to millions of folks losing coverage and primarily because of red tape, administrative bureaucracy. We don't think that has any role in healthcare coverage,” said Daniel Tsai, CMS deputy administrator and director of the Center for Medicaid and Children's Health Insurance Program Services.

Supporters argue work requirements would encourage people to transition off government health programs into private insurance. "The way to escape poverty and the way to have a flourishing life is to work, provide for your family and then move up the income ladder,” Angela Rachidi, senior fellow at the conservative American Enterprise Institute said during a Kaiser Family Foundation webinar April 25.

According to Census data compiled by the Kaiser Family Foundation, the vast majority of nonelderly adult Medicaid beneficiaries who don't receive Social Security disability benefits and aren't also enrolled in Medicare are already working or cannot work. As of March 2021, 43% had full-time jobs, 18% had part-time jobs, and the most of the remainder were caretakers, had illnesses or disabilities, or were students, the data show. Just 9% reported not working because they were retired, couldn't find jobs or for other reasons.

Based on their experiences in 2018, the potential downsides of this policy aren't theoretical to Arkansas providers.

Lee County Cooperative Clinic, a federally qualified health center in Marianna, Arkansas, treats a patient population that's around 13% uninsured. When work requirements kicked in, that spiked to 22%, CEO Kellee Mitchell Farris said. Returning to that level would squeeze the community health center's finances, she said.

“For the health centers that are still treating the patients regardless of their inability to pay, that of course affects our bottom line. We're not able to provide all of the programs that we generally would be able to provide, if our bottom line wasn't being affected,” Mitchell Farris said. For instance, the clinic might have to curtail the transportation services that enable its patients to make their appointments, she said.

Providers already are coping with other challenges: the aftermath of the worst stretches of the COVID-19 pandemic, the end of pandemic-era financial support and looming redeterminations of Medicaid eligibility that could remove 15 million people from the program.

Victoria Turner contributed to this story.

Clarification: This story has been updated with more information about the Ohio Hospital Association's position on Medicaid work requirements.