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One of the more hidden costs of Medicaid work reporting requirements has now become more visible. A Government Accountability Office (GAO) report published on October 10 reveals that several states that received federal approval to institute Medicaid work requirements are projected to spend tens, and in one case hundreds, of millions of dollars to implement them. While we’ve written about the costs of Medicaid work requirements previously, the GAO report throws these costs into sharp relief. Additionally, the report has a new and startling finding that the Centers for Medicare & Medicaid Services (CMS) is not sufficiently reviewing these administrative costs when approving state Medicaid work reporting requirement requests.
The GAO report confirms what has long been known about work reporting requirements – that states will spend a significant amount of money to implement them while getting nothing beneficial in return. Work reporting requirements are simply a paperwork burden that are cumbersome for individuals to meet and expensive to states to administer. When implemented in other public benefits programs such as TANF, they have not been effective in helping individuals work. And in Arkansas, the one state that has implemented them in its Medicaid program, 18,000 individuals lost their coverage in 2018, including individuals who were working. While state policymakers may believe that reducing Medicaid enrollment will save money, in reality, having more uninsured residents means states will spend more on uncompensated care. Taken together with the high administrative costs that the GAO report sheds light on, it’s clear that Medicaid work reporting requirements are nothing but a barrier to health coverage that are harmful to both individuals and states.
Despite the overwhelming evidence that work reporting requirements don’t work, they have remained a popular policy proposal for states. So far, CMS has approved Medicaid work requirements in ten states (Arizona, Arkansas, Kentucky, Indiana, Maine, Michigan, New Hampshire, Ohio, Utah and Wisconsin) and nine more are awaiting CMS approval (Alabama, Idaho, Kansas, Mississippi, Montana, Oklahoma, South Dakota, Tennessee, Virginia). After the November 2018 elections, though, Maine’s newly-elected Democratic Governor Janet Mills announced she would not move forward with implementation, and newly-elected Democratic Governor Gretchen Whitmer in Michigan announced plans to lessen the reporting requirements as a way to lessen coverage losses.
Fortunately, litigation to stop the implementation of Medicaid work reporting requirements has been successful in three states – Arkansas, Kentucky and New Hampshire (and a new case against work requirements was recently filed in Indiana). Additionally, Arizona decided to suspend implementation of its work reporting requirements due to this litigation. While these cases are currently on appeal, recent oral arguments indicate that the appeals court agrees with the lower court’s ruling that work requirements do not promote the objectives of the Medicaid program. The purpose of the Medicaid program is to provide health coverage to low-income individuals and families so they can maintain their health and wellbeing. By standing between individuals and their health coverage, work requirements only serve to make individuals less healthy and less able to work. Given the costs of work requirements and the fact that they hinder, rather than further, the purpose of Medicaid, states would be better off spending the funding they’re setting aside for work requirements on providing health care to their Medicaid enrollees. Judge Boasberg said it best when he struck down New Hampshire’s work reporting requirements: “We have all seen this movie before,” and it doesn’t have a happy ending. Since some states don’t seem to be getting the message, however, it bears repeating that work reporting requirements don’t work.