Experts question potential savings in Medicaid work requirements
It’s been nearly a month since Judge James E. Boasberg of the Federal District Court for the District of Columbia overturned Medicaid work requirement programs in Arkansas and Kentucky.
But the programs remain a popular idea, with waivers gaining approval to implement work requirements in eight states since last year. Missouri Senate Bill 76 seeks to create a similar program. Though most MO HealthNet users already fulfill work requirements for a different program or are exempt for medical conditions, the bill would result in dropping a few thousand recipients, according to a state study.
SB 76 would require 80 hours a month of work, either in formal employment, volunteering or a drug rehabilitation program. Exemptions are offered for children, the elderly and those with disabilities.
While the decrease in enrollees would save money initially, the cost of uncompensated care could outweigh the benefits, according to two experts who have studied the issue.
“Many (Medicaid enrollees) don’t fit the formal definition of disabled,” said Linda Li of the Center for Health Economics and Policy at Washington University in St. Louis. Some people with disabilities have symptoms that don't fit into a simple medical diagnosis, and without that, the work requirements of the bill would still apply, she said.
Li’s study, "Weighing the Cost Savings of Medicaid Work Requirements in a Non-Expansion State," highlights perhaps the most pressing concern about the work requirements. When those who don’t have a disability diagnosis lose coverage for failing to meet work requirements, the state sees higher rates of uncompensated care.
Further confusing the situation, Missouri’s non-expansive Medicaid system could have a profound effect on widening Missouri’s existing coverage gap, according to Li's report.Missouri is among more than a dozen states that have not expanded Medicaid, an option made available under the Affordable Care Act.
Under the law, states can expand Medicaid for low-income individuals who earn roughly $16,750 or $34,640 for a family of four, according to previous Missourian reporting.
Missouri’s income requirements are low in comparison to many other states. This means that if low-income Medicaid users find employment, they risk making too much money to qualify for coverage. These people often don’t make enough to shop in the marketplace for plans, and they don’t have the option of private insurance through work, Li's report found.
Robin Rudowitz of the Kaiser Family Foundation said, “To date, there have been no approvals (of waivers for) non-expansive states. It’s unclear how (Centers for Medicare and Medicaid Services) will respond to those states.”
States with approvals, such as Indiana or Kentucky, have more lenient income requirements. Li said expanding Medicaid requirements would fix many of the work requirement concerns.
“This could make the work requirements actually cost-effective,” she said. “It may make the coverage gap much smaller.”
Rudowitz agrees. State Medicaid programs spend more money when people are pushed off the system, she said. And Li's report notes that there would be additional costs associated with implementing the supervision of work requirements.
“Generating reductions in coverage means costs could pop up elsewhere in uncompensated care,” she said.
Supervising editor is Mark Horvit, horvitm@missouri.edu.