Health Care Providers, Advocates Explain Harm of Medicaid Work Requirements

Center on Budget and Policy Priorities

February 21, 2019
By Kyle Hayes
https://goo.gl/Uh5F87

With the Trump Administration re-approving Kentucky‘s Medicaid waiver that takes Medicaid coverage away from people not meeting work requirements, a group of health care providers and advocates has filed an amicus brief to explain the harm of this policy. The brief from the American Academy of Pediatrics, American College of Physicians, the American Medical Association, American Psychiatric Association, Catholic Health Association of the United States, March of Dimes, and National Alliance on Mental Illness offers five lessons for state policymakers considering conditioning Medicaid coverage on work.

1. Medicaid eligibility restrictions will cause tens of thousands to lose access to health coverage.

The brief cites the state’s own projections that Kentucky HEALTH — the state’s waiver — will generate 1.14 million lost coverage months. That’s the equivalent of nearly 100,000 people losing coverage for a full year, or, as we’ve noted, well over 100,000 people experiencing gaps in coverage. “That is because most of Kentucky’s unemployed beneficiaries are not merely jobless; they are unable to work,” the brief states. “Even those who are actively looking for employment face serious issues in finding and keeping a job that will only be exacerbated by taking away their health care. And many Medicaid beneficiaries who have jobs do not work according to consistent schedules — making it difficult to meet Kentucky HEALTH’s one-size-fits-all work requirements.”

Moreover, while Kentucky claims that people losing Medicaid will find other coverage, the brief concludes, “The large majority of both working and non-working beneficiaries who lose Medicaid will lose their health coverage altogether.”

2. Losing coverage will worsen health.

Of the health impacts of Kentucky’s waiver, the brief states, “Many of the disenrolled will become sicker, and some could die prematurely.” The brief highlights the harm that results from people experiencing gaps in coverage, noting, “Periodic gaps in coverage trigger a cascade of negative health effects. Even the short-term uninsured are consistently and significantly less healthy than the insured.…Health care delivery breaks down for patients who lack continuous coverage…. Intermittent coverage also reduces access to preventive screenings and treatment. Beneficiaries with coverage gaps are significantly less likely to get mammograms, Pap smears, or screening for hypertension and high cholesterol. Then, once conditions arise, coverage gaps make it far more difficult for patients to get needed treatment.”

The effects will be even worse for people who already have serious health conditions. “Discontinuing coverage for patients who have already been diagnosed with cancer or another chronic disease can be nothing short of catastrophic…,” the brief states. “This care saves lives. Uninsured patients with cancer, diabetes, and heart disease have much worse survival rates than insured patients suffering from the same diseases.”

3. Taking away coverage from people who don’t meet a work requirement won’t promote work.

While Kentucky and the Trump Administration argue that taking away Medicaid coverage from those who aren’t working will incentivize them to find a job, the effect will likely be the opposite. “Thousands of Medicaid beneficiaries medically cannot work, face serious difficulties in finding employment, or work too inconsistently to meet the work requirement. Holding health coverage hostage will only exacerbate these problems,” the brief states. In fact, the concept of conditioning health coverage on work confuses the relationship between the two. Health coverage lowers the risk of unemployment, the brief explains: “For those who are working, Medicaid coverage makes it easier to hold down their job; for those who do not have a job, coverage makes it easier to find one…. Kentucky HEALTH, by contrast, reinforces a vicious Catch-22: The long-term unemployed are not working in part because they lack coverage, but they cannot obtain coverage in part because they are not working.”

4. Implementing complex new restrictions will increase administrative costs for states.

Complex Medicaid waivers such as Kentucky’s are costly to implement. As the brief explains, “the plan will create new administrative expenses, and increase program costs when healthy beneficiaries lose their coverage only to re-enroll when their health has worsened and their conditions are more costly to treat.” As my colleague Jennifer Wagner explains, complex Medicaid restrictions will require states to overhaul their eligibility systems, including by creating new systems for documentation and beneficiary notification, adding staff to evaluate beneficiary exemptions and appeals, and more. Creating that administrative system could cost Kentucky over $180 million in the first six months alone. And the cost does not end there. “Administering Medicaid will now be more expensive because of the ‘churn’ — the costly pattern of short-term enrollment, disenrollment, and re-enrollment — the program will create,” the brief states.

5. Eligibility restrictions will also jeopardize financial gains for providers.

Kentucky’s waiver will strain health care providers’ finances, the brief states. “Without a reliably insured patient population, rural providers could be forced to shut their doors.” The experience of rural hospitals in recent years bears that out. Rural hospitals in states that have expanded Medicaid under the Affordable Care Act (ACA) have fared better than those in non-expansion states. From 2013 to 2015, hospital uncompensated care costs fell by nearly half in expansion states, compared to 11 percent in non-expansion states. In Kentucky, hospital uncompensated care dropped by $1.15 billion in the first three quarters of 2014. Reducing coverage through work requirements and other restrictive policies in Kentucky’s waiver and waivers in other states, including six-month coverage lockouts, delayed coverage dates, and loss of retroactive coverage policies, would jeopardize the financial gains that providers have made through the ACA’s Medicaid expansion.

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