State Will Ask Feds For Work Requirements For Medicaid Recipients, Though Debate Continues On Idea

Jan 22, 2018

The budget passed last year requires the state to apply for permission to impose work requirements on able-bodied Medicaid recipients. That could mean thousands of Ohioans could lose their health care coverage. While some support the idea, it's controversial to others.

(Watch the full discussion on this issue on "The State of Ohio".)

Generally, conservatives and liberals disagree strongly over work requirements for Medicaid recipients.  From the right is Rea Hederman with the Buckeye Institute, which calls itself a free market think tank: “Healthy people can work, they can go to job training and this will help them over the lifetime as they acquire valuable skills to make them worth more in the labor market.”

And from the left is Wendy Patton with Policy Matters Ohio, which studies labor and other issues from a progressive perspective: “Work requirements are redundant and unnecessary because this population is already working.”

Patton says the Kaiser Family Foundation shows 60% of Medicaid recipients are working, while another 10 percent are looking for work. She says in Ohio that number is closer to 15%.  Of the remaining Medicaid recipients who aren’t working, about a third are disabled, another third are caring for a family member, around 15% are in school and 10% are retired. So the population that would be affected by work requirements is small.

But Hederman notes a reason why states are going forward with applying for waivers – the Affordable Care Act.  “What Medicaid expansion, or President Obama said, now we’re going to make it available to single healthy adults – able-bodied males could now be eligible for the Medicaid program. And that’s a real fundamental shift, taking the program from focusing on needy people to now has an entitlement where able-bodied people could get it,” Hederman said.

And Hederman says this is a disincentive leading people to drop out of the labor market, which will hurt them over time as skills deteriorate and they earn less money.

But Patton says the problem is the churning low-wage labor market and how it meshes with stringent work requirements. “Many people get less than 20 hours a week, and schedules are very variable. There’s a lot of flexibility. Someone may not make their monthly work requirement just because of a scheduling problem at their workplace and lose their health care as a result. This is another bad outcome,” Patton said.

And there are questions about whether Medicaid recipients who find low-wage jobs would make too much money to qualify for Medicaid – and those jobs would likely not come with health insurance benefits.

But Hederman says requiring work for benefits brings Medicaid in line with other program such as SNAP, or food stamps. And getting a job isn’t the only way to meet those requirements - recipients can be looking for work, volunteering, or be in school or job training. But Patton also adds that she’s concerned about a lack of funding for those programs.  “We’re under-resourced in training right now as it is. Some of the goals that we want to get to – offering training that’s appropriate and help people move up – that’s all good,” Patton said. “Doing it with a big stick that can knock people out of their health coverage is a bad way to go about it.”

Gov. John Kasich has been a strong supporter of Medicaid expansion. In the budget, majority Republican state lawmakers ordered the state apply for the work requirements waiver, and also are requiring the Kasich administration to ask for Medicaid expansion funding every six months. But budget director Tim Keen has said he thinks the number of people who will lose coverage because of work requirements won’t be a significantly large number. And Hederman agrees that the point isn’t to save the state money. “I don’t think that this is a budget cutting exercise, because there are more effective ways to reduce Medicaid than looking at this. This is a matter of aligning incentives.”

So far 10 states have applied for waivers to impose work requirements on Medicaid recipients. Ohio hasn’t applied for the waiver yet.