Paul Ryan Adds Useless and Cruel Work Requirements to Medicaid

By Bryce Covert, ThinkProgress

23 March 17

It will cost vulnerable people their insurance without helping anyone actually find work.

he House is scheduled to vote on Trumpcare Thursday night, but it’s still up in the air whether Speaker Paul Ryan (R-WI) will have the votes to get it passed.

So in an effort to secure more votes from Republican lawmakers who feel that the legislation doesn’t go far enough, Ryan submitted a “manager’s amendment” on Monday that deepened many of its cuts. It includes a new provision letting states impose work requirements on people who enroll in Medicaid.

For all the talk of Ryan as a serious policy wonk, this policy won’t improve employment or earnings for Medicaid recipients — or even save money. Instead, it will just cut vulnerable people off from health care.

One rationale for forcing people who get their health insurance through Medicaid to work is that the expansion of the program under the Affordable Care Act incentivized laziness among recipients. It causes “idleness,” in the words of Rep. Jodey Arrington (R-TX), because it’s a “seductive entitlement.”

But the evidence shows the opposite is true. As a report from the Urban Institute notes, “Trends in employment status, number of hours worked per week, full-time work status, wages, and job switching were no different across Medicaid expansion and nonexpansion states following implementation.”

In fact, nearly 80 percent of adults on Medicaid live in a household where at least one person is working, while about 60 percent work themselves, most of them full time.

The reason they need Medicaid, then, is because they can’t get affordable health insurance from their jobs. By definition, these are people in low-wage work — an individual has to make $16,642 a year or less to qualify under the ACA’s expansion. Many of their employers may not offer plans they can pay for. Meanwhile, about 40 percent work at companies that are small enough to not be required to offer coverage at all under the ACA, and many of them work in industries that typically don’t offer it.

What this means is that adding a work requirement to Medicaid won’t affect the majority of recipients who already have a job. What it will do instead is threaten insurance coverage for those who have good reasons not to work. According to the Kaiser Family Foundation, more than a third say they aren’t working primarily thanks to an illness or disability, 28 percent say they are caring for their families or homes, 18 percent are in school, and 8 percent are retired.

A work requirement will likely mean that these people simply lose their health care coverage, given that it’s already difficult for them to work and it is usually administratively impossible to get an exemption. According to an analysis from Hannah Katch, a Medicaid expert at the Center on Budget and Policy Priorities, “The principal effect of imposing rigid work requirements in Medicaid would likely be to make it more difficult for many of these individuals to address their problems, by taking away their health coverage.”

On the other hand, having Medicaid appears to make working and finding work easier. In a report on enrollees in Ohio’s Medicaid expansion, more than half of those with a job said having that insurance had made it easier to keep working, while three-quarters of unemployed enrollees said it made it easier to look for a job.

Proponents of work requirements for safety net programs often back up their support by pointing to one large federal benefit that has one: the Temporary Assistance for Needy Families (TANF) program, or cash welfare. When welfare was overhauled in the mid-90s, lawmakers added a strict work requirement. Ryan himself has called welfare reform, including this addition, “revolutionary.”

But while reform was supposedly meant to get people “off welfare and into work,” the requirement hasn’t functioned as promised. In a study of Maryland’s experience, within the first year of being pushed off of TANF, more than a quarter of people had no job at all, while almost 40 percent either didn’t work or only worked for a small portion of the year. Five years later, the situation was even worse: 37 percent had no job at all, while more than 45 percent either didn’t work or worked only a bit each year.

In other states, former recipients who were pushed off thanks to work requirements worked at rates equal to or lower than those who weren’t subject to them. Any initial bump in employment eroded over a five-year period.

Instead, the share of low-income single mothers — one of the biggest groups served by welfare — who don’t get benefits but also don’t have a job rose over 15 years, from about one in eight in 1996 to one in five by 2008 — now 1.2 million people total. By 2008, median family income for these mothers was just $535 per year. Per year.

Those who got jobs didn’t fare a whole lot better. In Maryland, more than half who had work experienced unstable, low, or falling earnings, and only 8 percent earned enough to escape poverty. Elsewhere, the majority of former recipients who had work only had unstable job situations, working less than three-quarters of a given year.

Pushing Medicaid recipients to get a job isn’t likely to even save money. Any proposed savings would come from people leaving the program to get insurance through work. But 60 percent of the program’s spending goes to caring for the elderly, people with disabilities and in long-term care, and children. None of them is likely to be able to get a job.

Instead, it could cost states even more money, adding thousands of dollars per recipient as they have to create new programs and staff to monitor whether recipients comply with the requirements.