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Column: Medicaid work requirements cost millions, achieve nothing -- and may be illegal

Donald Trump, Matt Bevin
Kentucky Gov. Matt Bevin and President Trump are on the same page when it comes to imposing useless work requirements on Medicaid enrollees.
(Carolyn Kaster / Associated Press)

This may have been overlooked in the torrent of recent news about the Trump administration’s assault on government norms, but its initiative to impose work requirements on Medicaid enrollees has had a tough couple of weeks.

First came a report from the Government Accountability Office dated Oct. 1, finding that administering the work rules costs hundreds of millions of dollars — and that federal officials didn’t even think about the potential costs when they started hastily approving the rules as numerous red states requested.

Even more troubling for fans of this questionable innovation was an oral argument on Oct. 12 before a three-judge panel of the Court of Appeals for the District of Columbia Circuit. The three judges, including David B. Sentelle, a Reagan appointee, were unanimously skeptical that the work rules were acceptable under Medicaid law.

You haven’t addressed coverage in any way that judges can...be satisfied that this is reasoned decision-making.
U.S. Appellate Judge Harry T. Edwards, to a government lawyer
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In the words of Nicholas Bagley, a healthcare law expert at the University of Michigan, the arguments were “brutal for the Trump administration.” The appeals court is expected to rule sometime in the next few months.

The administration has approved the imposition of work requirements on Medicaid recipients in nine states. A federal judge blocked or overturned the rules in three of those states — Arkansas, Kentucky and New Hampshire; his ruling was the subject of the oral arguments in appellate court last week.

We’ve compiled a list of the 10 worst Trump actions on healthcare so the cumulative impact is clearer.

The Trump administration has approved work requirements in six other states, and applications from nine other states are pending.

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That all unfolded against the backdrop of evidence that the work rules are a failure in policy terms (unless the policy goal is to throw people off Medicaid). As we’ve reported, evidence from the initial rollout of work requirements in Arkansas, the first state to implement the rules, indicates that the policy has been catastrophic for the target population.

According to a study published this summer in the New England Journal of Medicine, among those in the first phase of the Arkansas policy — those ages 30 to 49 — coverage from Medicaid and Affordable Care Act marketplace plans declined by a stunning 12 percentage points.

Ever since Arkansas implemented its first-in-the-nation work requirements for Medicaid in June 2018, the state has functioned as a laboratory for the concept of placing unnecessary obstacles in the way of low-income people seeking health coverage.

As for the putative carrot in the state’s carrot-and-stick approach, which was to get more enrollees into jobs, that failed miserably. The researchers from the Harvard School of Public Health “did not find any significant change in employment ... or in the related secondary outcomes of hours worked.”

In conclusion, the study found that “in its first 6 months, work requirements in Arkansas were associated with a significant loss of Medicaid coverage and rise in the percentage of uninsured persons.”

This double-barreled failure shouldn’t be surprising, because the underlying motivation of work requirements for Medicaid enrollees is punitive. All the talk from states that are trying to impose the work rules, and from the administration, that their intention is to help enrollees enter the workforce is just window dressing.

The real goal is to discourage people from signing up for the state-federal program, and erect barriers to their staying signed up. The work rules generally include provisions punishing those who don’t meet the requirements by locking them out of Medicaid for as long as a year.

The states typically require enrollees to report their work hours regularly, often via online portals that are offline for much of the day or don’t function at all, and are obviously useless for people who don’t have internet access.

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Findings like those from the Harvard study prompted U.S. Judge James E. Boasberg to overturn the Arkansas program and block plans in Kentucky and New Hampshire. Boasberg’s main issue was that the Department of Health and Human Services hadn’t bothered to assess how many people would lose their eligibility under the rules. The failure to consider all such ramifications made the rules “arbitrary and capricious,” and therefore illegal under federal law.

One can say this about the hoops Kentucky will require low-income residents to jump through to become eligible for Medicaid: If you were deliberately trying to come up with ways to throw people off the program, you couldn’t do better.

The appellate judges appeared to find Boasberg’s reasoning compelling. They went as far as to call it a “very thorough and careful analysis” and asked Alisa Klein, the government’s lawyer, why it shouldn’t be treated as “eminently correct.”

The judges seemed to have little regard for Klein’s argument that the work rules were justified because the states were imposing them as experiments to determine whether the work requirements could serve Medicaid by transitioning its enrollees to employee-sponsored health coverage and making them healthier. Those outcomes would save the program money, Klein argued, which would allow it to serve more people needing care.

Told that the idea underlying the work requirements on enrollees is that they would “help lift them out of the programs,” Judge Cornelia T.L. Pillard asked, “Where is your best evidence in the record ... that imposing a work requirement with monthly reporting is even plausibly going to cause that effect?”

Klein observed in response that “social science evidence” had persuaded Congress to impose work requirements on recipients of food stamps and Temporary Assistance for Needy Families (TANF), commonly known as garden variety welfare.

“But Congress didn’t put it here,” Sentelle said, referring to the work requirement in Medicaid. “Congress put it where they thought it would work, and didn’t put it here.... Then Congress didn’t think it would work here, did they?”

Echoed Judge Harry T. Edwards, “Right.” He added, “You haven’t addressed coverage in any way that judges can ... be satisfied that this is reasoned decision-making.”

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Indeed, the evidence is that the administration’s effort to allow states to impose work rules on Medicaid was hasty and slipshod.

The work requirements on Medicaid became part of the Trumpian toolbox in early January 2018, when Seema Verma, director of the Centers for Medicare and Medicaid Services at Health and Human Services, published guidelines endorsing those preconditions for receiving Medicaid.

Ignoring empirical evidence that it’s fomenting a healthcare catastrophe, and a federal judge’s warning that it’s legally out of line, the Trump administration has quietly reapproved a punitive work requirement for Medicaid clients in Kentucky.

Verma approved Kentucky’s application to impose work requirements, which had been pending, the very next day. As it happens because Kentucky’s program was held up in federal court, Arkansas actually became the first state to impose the rules, launching its changes in March 2018.

The GAO found that the government made no effort to weigh the costs of the changes against any possible gains, even though the federal budget would bear most of the burden. In Kentucky, where as many as 620,000 residents might be affected, the GAO estimated the administrative costs at $271.6 million. In Arkansas, where the target population was 115,000, the administrative costs were $26.1 million.

That was important, the GAO observed, because the work requirements were supposed to be budget-neutral — that is, they wouldn’t cost the government money on a net basis.

That points to the only suitable conclusion for why the Trump administration and the red states indulged in this experiment in the first place: for ideological, not health-related or economic reasons.


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