Experts Wary of Medicaid Work Rule

Valley News Staff Writer
Saturday, February 03, 2018

West Lebanon — Following the Trump administration’s announcement last month that it would allow states to require most working-age adults to work in order to qualify for Medicaid, New Hampshire seems likely to move forward with its proposal to do so.

The plan could apply to as many as 53,200 recipients in the state — including about 3,500 in Grafton County and 2,000 in Sullivan — though many already are working.

New Hampshire’s waiver request, developed in accordance with a state law, is pending before the U.S. Centers for Medicare and Medicaid Services. It would require new adult beneficiaries of expanded Medicaid to work at least 20 hours per week when they apply for benefits. The number of required hours gradually would increase to 30 after two years.

Traditional Medicaid provides health coverage for some low-income people, families and children, pregnant women, the elderly and people with disabilities. Such recipients would not be required to comply with New Hampshire’s work requirement.

In states that expanded Medicaid under the Affordable Care Act, including Vermont and New Hampshire, adults have become eligible for Medicaid based on income alone. All adults with an income of less than 138 percent of the federal poverty level can now qualify for the program.

New Hampshire, according to the waiver request, would exempt people from its work requirement — at least temporarily — if they have a doctor’s note certifying that they are ill, if they are participating in a drug court program, if they are caring for a child under 6 or for someone else who needs care.

“Work requirements offer opportunities to lifting individuals out of poverty, empower them with the dignity of work and self-reliability while also allowing states to control the costs of their Medicaid programs,” Republican Gov. Chris Sununu said in a statement released earlier this month following the federal policy announcement.

But in recent interviews, a Medicaid recipient with Upper Valley ties, public health advocates and academics who study social policy said a work requirement has the potential to create a barrier to health care for low-income people.

They also questioned whether a work requirement will in fact help bring recipients of New Hampshire’s expanded Medicaid program — who numbered 53,218 as of Dec. 31 — out of poverty or reduce Medicaid costs for taxpayers.

“It really depends on how the states implement it,” said Allyson Wendt, a 38-year-old Dartmouth College graduate who lives in Brattleboro, Vt., and gets her health coverage through expanded Medicaid.

Vermont leaders are unlikely to implement a Medicaid work requirement. Rebecca Kelley, a spokeswoman for Gov. Phil Scott, said in an email that Scott “has said it’s not something we’ve contemplated here in Vermont.”

But Wendt — who has a variety of medical conditions including debilitating migraines, rheumatoid arthritis and post-traumatic stress disorder stemming from sexual trauma — said that she worries that a work requirement could “hurt a lot of people.”

Wendt suffers from PTSD-related seizures, and she had to leave her part-time job in late 2016 due to poor health. She is trying to get the federal disability designation that would allow her to receive Supplemental Security Income, but doesn’t yet have it.

She noted that people in a similar situation who live in New Hampshire might be considered “able-bodied” and therefore required to comply with the work requirement.

Wendt, who holds a graduate degree in English, has been receiving treatment and recently started freelance writing and editing 10 hours per week. She also sells crafts through Etsy, an online marketplace, but she doesn’t think she will ever be able to work a full-time job. She also has two young children and is going through a divorce.

“I have three to four days a week where I’m in bed,” she said. “It is what it is.”

Out of Poverty

Because people who receive Medicaid on the basis of income run the risk of losing their health insurance if they earn too much money, there is a disincentive for them to increase their earnings, said Greg Moore, the New Hampshire state director of Americans for Prosperity, an advocacy group funded in part by conservative industrialists David and Charles Koch that promotes limited government and pushes for regulatory and fiscal restraint.

With the work requirement, some people will increase their income too much to qualify for Medicaid, Moore said. At that point — assuming their employer doesn’t offer insurance — people will purchase insurance through the online marketplace created by the Affordable Care Act. There, Moore said, he expects that people who earn too much to be on Medicaid will still qualify for federal subsidies to help cover the cost of their health insurance.

“In light of that, it’s a way to continue to encourage people to move forward,” he said.

Dana Michalovic, executive director of Good Neighbor Health Clinic in White River Junction — which provides medical services to uninsured and underinsured adults — said she doubts that a work requirement will help Medicaid recipients.

Instead, she said, a slight income boost might disqualify someone from receiving other benefits such as fuel assistance and food stamps. Additional income also could reduce the amount a person gets for subsidized rent, Michalovic said.

“It would be fungible for a while in terms of increased earnings,” she said. “Maybe (it would) save taxpayers and the state money if they weren’t having to pay for those programs, but it wouldn’t particularly lift someone out of poverty.”

Getting a job may not necessarily mean that someone will earn enough to prevent them from qualifying for Medicaid, Dartmouth College economics professor Patty Anderson said.

“Most of them will be in jobs that don’t offer health insurance,” Anderson said. “A lot of these guys if they get a job (they’re) not getting off Medicaid. Maybe it’s just good for them to have a job.”

Reform efforts in the 1990s, which required people to work in order to receive welfare payments, also known as Temporary Assistance for Needy Families, did reduce the number of people who collect government assistance, Anderson said.

It is arguable, however, whether requiring people to work helped pull families out of poverty, she said. In addition to the work requirements, 1990s welfare reforms also included a five-year time limit for how long recipients collect welfare payments, Anderson said. And, the earned income tax credit, which provides low- and moderate-income workers with a tax credit or refund, also was implemented around the same time.

“It wasn’t like, ‘Wow, we made everyone self-sufficient by asking them to work,’ ” she said.

The work requirement may have been a disincentive for people to sign up for welfare, more than an incentive to work, she said.

“There were some indications that the rolls went down more than labor force went up,” she said.

This may have been because word on the street was that benefits were harder to get, which discouraged people from applying, she said, noting that the number of people on welfare did not increase during the Great Recession.

Moore, who served a decade ago as the director of public affairs and government relations at the New Hampshire Department of Health and Human Services, said work requirements as part of welfare reform that began in the 1990s reduced the number of New Hampshire individuals receiving welfare payments. Data from the U.S. Department of Health and Human Services shows a reduction from about 19,000 individuals receiving such payments in New Hampshire in 1997 to roughly 5,000 in 2016.

People become difficult to track once they stop receiving public assistance, so hard data on whether they are employed is hard to come by, Moore said. But, anecdotal evidence demonstrates that the program has helped the majority of people who are able to work get jobs, he said.

Moore described work requirements as a “more humane way of treating people. ... We want to encourage them to have fully independent lives where they’re able to seek out what they want to do.”

Proof of Employment

Making sure that Medicaid recipients comply with the work requirement will add an administrative burden, Anderson said. Some recipients might have trouble proving that they actually are working or studying, she said.

Wendt, for example, said that as a freelancer she is paid for the pieces of writing she completes, not by the hour. She also has no one supervising her or counting the hours she spends on her Etsy business.

But, Moore said, “That’s not a new problem.”

DHHS already tracks employment of welfare recipients, including freelancers and other people who are self-employed, he said.

The added administrative step may not result in cost savings, Anderson said. Because so many Medicaid recipients already work, there’s “only so much scope for what this (work requirement) could do,” Anderson said.

She cited data from a 2017 Kaiser Family Foundation analysis of both traditional Medicaid and the expansion that found that nationally, 60 percent of recipients under 65 who are not disabled work full- or part-time. Those not working include people who say they are too sick to work, but who don’t qualify for federal disability payments. Others cite schooling, caregiving, retirement and an inability to find jobs as reasons for not working.

Historically, 42 percent of New Hampshire’s expanded Medicaid participants have been employed, DHHS spokesman Jake Leon said in an email.

Suellen Griffin, chief executive of the Lebanon-based West Central Behavioral Health and president of the New Hampshire Community Behavioral Health Association, said it could be difficult to quickly determine whether someone is capable of working. The state’s mental health agencies are worried that adding another administrative step could delay benefits and care for people who need them, said Griffin, whose agency relies on Medicaid for 84 percent of its revenue.

“We are all concerned that it’s going to interfere with people getting timely benefits,” she said.

Griffin also said her agency saw a drop from a 9 percent rate of uninsured patients to a 4 percent rate with Medicaid expansion. She said that number could go up again if a work requirement is too burdensome.

“Maybe that’s part of the intent too,” Griffin said. If it’s “impossible to get then you won’t have to give it.”

Stick or Carrot?

To be effective, New Hampshire’s work requirement would serve as a way to help the few able-bodied people who aren’t already working become employed, said University of New Hampshire law professor Lucy Hodder, who directs the school’s health law and policy programs.

Doing so, however, means that the requirement can’t simply serve as a penalty for not working, Hodder said.

“If you’re using ‘you have to work’ as a penalty, you’re simply going to drive people further out of the mainstream; out of the care that they need,” she said.

Hodder noted that this policy shift is coming as the state — and the country — are in the midst of an opioid epidemic.

“Making sure that we’re addressing the need is critically important,” Hodder said.

Moore said that perhaps a fear of losing health insurance would force people struggling with addiction to get help.

Because being in treatment is one of the exemptions to the work requirement in New Hampshire’s proposal, Moore said, “this could have the effect of getting more people into treatment.”

But, being required to work in order to receive health care was not a part of the original concept of the Medicaid program, Hodder said. She described attaching a work requirement as “a fundamental shift in Medicaid policy.”

The program was designed to provide low-income people with a way to access health care services, Hodder said, without creating a “threshold they have to jump over.”

Designing a work requirement that helps get people into the workforce and doesn’t take away access to health care will require that the state help people prepare to join the workforce, she said.

“Someone who has not thought that they’re capable of working isn’t going to jump up the next day and say, ‘I’m really looking forward to all the skills I can contribute,’ ” Hodder said.

Michalovic, the director of Good Neighbor, also described getting people who aren’t working into the work force as “a heavy lift.”

It’s a population that will need significant support, training and education to overcome obstacles such as a lack of transportation, untreated mental health conditions, difficulty finding child care and, in some cases, criminal records, she said.

To really give people a hand up, Michalovic said, the program will need to help people create budgets, set priorities and “work a plan to jump those two or three income levels, so they aren’t just losing benefits and coping with the stress of poverty.”

Stress alone can worsen health conditions such as high blood pressure, she noted.

“I think we have to start looking at the whole person,” she said.

Partly because this program — to be successful — will require these extra supports, Hodder said she doubted the state would realize cost savings from a work requirement.

“I can’t imagine it’s any more than neutral,” she said.

Public Perceptions

Alice Ely, executive director of the Public Health Council of the Upper Valley, said this policy shift seems to reflect gaps in common knowledge, including the number of employers who don’t provide affordable health insurance to their workers; the number of employers who rely on part-time workers for whom they are not required to provide health insurance; and the high premiums available to those who purchase insurance through healthcare.gov.

“Medicaid is becoming the health insurance of last resort for more and more people who are working,” Ely said.

Rather than implementing a work requirement, Ely suggested reducing the number of people on Medicaid by focusing “more energy on helping people find jobs that paid a living wage and jobs that were full-time that paid with benefits.”

If more people had jobs like that, she said, “maybe you wouldn’t need to have this particular change in the Medicaid legislation. It would just follow.”

Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603- 727-3213.