Hiltzik: Those dysfunctional Medicaid work rules are back on the table

In any contest to name the cruelest and most useless healthcare “reform” favored by Republicans and conservatives, it would be hard to beat the idea of applying work requirements to Medicaid.

Yet, it’s back on the table, teed up by congressional Republicans as a deficit-cutting tool.

In a rational world, this idea would have been consigned to the dumpster long ago, and forever. It’s billed as a way to reduce joblessness, but doesn’t. It’s billed as an answer to the purported complexity of Medicaid, but makes the system more complicated for enrollees and administrators. It’s billed as a money-saving reform, but adds to Medicaid’s costs.

So what does it accomplish? It’s very effective at throwing eligible people out of Medicaid.

House Budget Committee Chairman Jodey Arrington (R-Texas) gave the game away last week when he told reporters that a “responsible and reasonable work requirement” for Medicaid would produce about $100 billion in savings over 10 years, or $10 billion a year.

That wouldn’t make much of a dent in the annual cost of Medicaid’s coverage of its 72 million beneficiaries, which came to about $853 billion last year.

Nor would it do much to defray the estimated $4-trillion 10-year cost of extending parts of the 2017 Republican tax cut, which is the ostensible reason for seeking out penny-ante savings in budget categories such as a social safety net, according to the Washington Post.

Whatever the putative rationale, there are only two ways to extract even $10 billion in savings from Medicaid: Strip benefits from the program, or throw enrollees out.

One other thing about imposing work requirements on Medicaid: It’s illegal. That’s the conclusion of federal judges who reviewed the idea the last time it was implemented, during the first Trump term.

U.S. District Judge James E. Boasberg and a three-judge panel of the U.S. Court of Appeals for the District of Columbia found that the legal waivers that allowed individual states to experiment with work requirements didn’t meet the key prerequisites for such “reforms” according to Medicaid law — that they serve the program’s objectives, specifically the goal of bringing health coverage to low-income Americans.

The courts invalidated work requirement waivers President Trump granted to three red states. When President Biden arrived at the White House in 2021, he canceled the waivers outright and shut down the work-requirement pipeline.

Despite that legal history, Medicaid work requirements remain a beloved hobby horse of conservatives. The idea is a component of Project 2025, the right-wing road map to federal policy changes in a second Trump administration. So let’s take a closer look at the record.

The place to start is with conservatives’ historic disdain for Medicaid. This derives, as Drew Altman of the health policy think tank KFF astutely observed, in part from the divergent partisan views of the program: “Democrats view Medicaid as a health insurance program that helps people pay for health care.” By contrast, “Republicans view Medicaid as a government welfare program.”

Thinking of Medicaid as welfare serves another aspect of the conservative program, in that it makes Medicaid politically easier to cut, like all “welfare” programs. Ordinary Americans don’t normally see these programs as serving themselves, unlike Social Security and Medicare, which they think of as entitlements (after all, they pay for them with every paycheck).

From the concept of Medicaid as welfare it’s a short step to loading it with eligibility standards and administrative hoops to jump through; Republicans tend to picture Medicaid recipients as members of the undeserving poor, which aligns with their view of poverty as something of a moral failing. Work requirements, then, become both a punitive element and a goad toward “personal responsibility,” a term that appears in Project 2025’s chapter on Medicaid.

The idea that work requirements for Medicaid can have a measurable effect on joblessness is the product of another misconception, which is that most Medicaid recipients are the employable unemployed. As is often the case with right-wing tropes, this is completely false.

According to census figures, 44% of Medicaid recipients worked full time in 2023 and 20% worked part time. An additional 12% were not working because they were taking care of family at home, 10% were ill or disabled, 6% were students, and 4% were retired. Of the remaining 4%, half couldn’t find work and the remaining 2% didn’t give a reason.

That might account for why Arkansas, the one state that actually implemented work rules under the Trump administration, experienced no increase in either “employment nor the number of hours worked” among the Medicaid-eligible population, in the words of the Congressional Budget Office.

Official state statistics showed that in the first six months of implementation, 17,000 Arkansans had lost their Medicaid eligibility. That figure was what provoked Boasberg to suspend the Arkansas program and block a similar effort in Kentucky before it could even start.

The Trump administration had approved Medicaid work requirements for 13 states and had approvals pending in nine others — all were under the control of Republican governors or legislatures or both — before the waivers ran into the court blockade and ultimately into the accession of the Biden administration.

The Arkansas rules required Medicaid enrollees to show 80 hours per month of employment, job search, job training or community service. Pregnant women, the disabled, students and a few other categories were exempt. Enrollees who didn’t meet the requirement for three months were summarily excised from Medicaid and couldn’t reenroll until the following year.

Evidence compiled by healthcare advocates suggested that administrative snafus largely prevented even employed enrollees from submitting evidence of employment. The work hour reports had to be made online, even though the reporting website was out of order for long stretches and many enrollees didn’t have adequate internet access.

The effect of the policy on health coverage in Arkansas was calamitous. Medicaid enrollment fell by a stunning 12 percentage points. The percentage of uninsured respondents in the 30-49 age cohort, which was the first group targeted in a stepwise introduction of the requirement, rose to 14.5% in 2018 from 10.5% in 2016.

None of this reality dissuaded the authors of Project 2025 from resurrecting work requirements for Medicaid. Their discussion is redolent with disdain for the program and its enrollees — especially for beneficiaries of the Affordable Care Act’s Medicaid expansion, which added childless low-income households to a program that had chiefly covered families with children.

Since the 1980s, Project 2025 asserted, Medicaid had “evolved into a cumbersome, complicated, and unaffordable burden on nearly every state.”

The truth is, of course, that in the most significant expansion of the program, under the ACA, 100% of the cost of covering the new enrollees was borne by the federal government from 2016 through 2018, gradually declining to 90% in 2020 and thereafter. That’s significantly higher than the federal share of costs for the original enrollee category.

Project 2025’s Medicaid chapter falsely states that the ACA “mandates that states must expand their Medicaid eligibility standards” to include all individuals with income at or below 138% of the federal poverty level.”

The truth is that this was originally part of the ACA, but it was invalidated by the Supreme Court, which ruled that the federal government must give states the choice of whether to accept the expansion. That’s the state of affairs to this day. The Supreme Court decision came down in 2012, so the Project 2025 authors don’t have much of an excuse for their ignorance of the facts. Anyway, 10 states, most of them deep red, still haven’t accepted the expansion.

Project 2025’s approach to Medicaid validates Altman’s perception that conservatives see the the program chiefly as welfare. Its goal is chiefly to find ways to cut costs, including through block grants (which deprive states of the flexibility they might need to fight disease outbreaks such as the pandemic), benefit caps and lifetime caps.

It proposes reducing or eliminating the 90% federal match rate, which would do nothing for enrollees and strain state budgets while preserving a few dollars for the feds. It calls for reducing Medicaid payments to hospitals, which keep some institutions, especially rural hospitals, fiscally afloat.

It calls for rooting out “waste, fraud, and abuse,” that all-purpose chimera evoked by budget-cutters as a painless way of reducing costs, but which no one ever seems to accomplish. And it calls for eliminating the “cumbersome” process of getting waivers improved — in other words, open the door for conservative political leaders to strip away the healthcare guarantees and standards that make Medicaid an effective deliverer of healthcare.

Don’t be fooled. The Project 2025 folks and their adherents in the coming Trump White House don’t want to make Medicaid more efficient, as they claim. They want to make it less relevant and less effective — and cheaper, the better to preserve those tax cuts. Those 72 million enrollees? They’ll just be collateral damage.