Major study suggests Medicaid work requirements are hurting people without really helping anybody

The first major study on the nation’s first Medicaid work requirements finds that people fell off of the Medicaid rolls but didn’t seem to find more work.

Since Arkansas implemented the nation’s first Medicaid work requirements last year, a new study published in the New England Journal of Medicine has found, Medicaid enrollment has fallen for working-age adults, the uninsured rate has been rising, and there has been little discernible effect on employment.

The research appears to confirm some of the warnings from Medicaid advocates who opposed the Trump administration’s approval of work requirements in Arkansas and other states. People are losing Medicaid coverage, often as a result of confusion rather than failure to meet the work requirements, but they aren’t finding jobs and getting insurance that way. They are simply becoming uninsured.

One paragraph succinctly summarizes the new study from a team of Harvard researchers led by Ben Sommers:

Using a timely survey of low-income adults, we find that Arkansas’s implementation of the nation’s first work requirements in Medicaid in 2018 was associated with significant losses in health insurance coverage in the policy’s initial six months but no significant change in employment. Lack of awareness and confusion about the reporting requirements were common, which may explain why thousands of individuals lost coverage even though more than 95% of the target population appeared to meet the requirements or qualify for an exemption.

The study focused on adults in Arkansas ages 30-49 — a working-age population less likely to be granted exemptions from the requirements — and used their peers in states that have not instituted work requirements, Texas and Louisiana, for comparison.

Sommers, et al/NEJM

They found that the percentage of low-income Arkansas adults ages 30-49 who said they had Medicaid or marketplace coverage fell from 70.5 percent in 2016, before the state put its work requirement in place, to 63.7 percent. The survey covered both Medicaid and the Obamacare marketplace because Arkansas has pioneered a unique version of Medicaid expansion under the Affordable Care Act. The state uses Medicaid dollars to pay for people who became eligible for Medicaid under the ACA expansion to receive private insurance on the marketplace.

The uninsured rate for the same population increased from 10.5 percent in 2016 to 14.5 percent in 2018. Employment declined among this group over the same time frame, from 42.4 percent to 38.9 percent, though that was true for all cohorts. But for Medicaid coverage and the uninsured rate, the population targeted by Arkansas’ work requirement saw significantly more deterioration than other age groups and people in other states.

The Harvard survey found that one-third of respondents in the age 30-49 range had not heard anything about Arkansas’s new work requirements for Medicaid. Nearly half of those people, 44 percent, said they were unsure whether the requirements applied to them. A significant number of people said a lack of internet access (32 percent) had contributed to their decision not to report their relevant information to the state.

Arkansas’ work requirements are currently on hold, after a federal judge ruled the requirements there and in Kentucky had violated federal law and the stated purpose of the Medicaid program. As the legal fight moves forward, data like that found in the new NEJM study should weigh heavily on the debate.

Why a federal judge blocked Medicaid work requirements in Arkansas and Kentucky

Judge James Boasberg, who previously ruled on technical grounds against work requirements in Kentucky, blasted the Trump administration in two decisions in March for failing to consider how many Medicaid beneficiaries would lose coverage under the states’ proposals to require that recipients work in order to receive their benefits.

He deemed the approval of the proposals in Arkansas and Kentucky by the administration to be “arbitrary and capricious” and said that the work requirements could not be allowed to remain in effect.

The rulings were a major loss for the Trump administration on one of its signature health policy crusades: introducing work requirements to Medicaid, the country’s largest health insurance program.

Arkansas was the first state to be allowed to implement Medicaid work requirements and, as a result, nearly 20,000 people have lost health coverage there. Boasberg began his ruling in the Arkansas case with the tale of one such person, Adrian McGonigal, who sued the state:

In mid-2018, McGonigal learned that he would be subject to new work requirements, which he would have to report online, as a condition of receiving health benefits. These were imposed by the Arkansas Works Amendments (AWA), approved by the U.S. Secretary of Health and Human Services in March 2018. Despite his lack of access to, and difficulty working with, computers, he was able to report his employment in June 2018, but he did not know he needed to continue to do so each month. As a result, when he went to pick up his prescriptions in October, the pharmacist told him that he was no longer covered, and his medicines would cost him $800. In the absence of Medicaid, he could not afford the cost of the prescriptions and so did not pick them up. His 2 health conditions then flared up, causing him to miss several days of work, and Southwest Poultry fired him for his absences. He thus lost his Medicaid coverage and his job.

Policy experts have argued from the start that work requirements were contrary to Medicaid’s purpose of providing health coverage to low-income Americans and that most people who are on Medicaid and can work already do work.

They had also warned that irregular hours and burdensome reporting requirements, rather than failing to work, were more likely to lead to people losing coverage. That was the case with McGonigal.

Boasberg took the unusual step of ruling that the work requirements be halted immediately. Often, in cases like this, the court will put a stay on its own ruling in order to avoid disruption in the real world while the case is being appealed, as is expected in this case. But the judge said that the seriousness of the Trump administration’s deficiencies in approving the Medicaid work requirements and the possible harm to people who would lose coverage if the work requirements were allowed to remain in place demanded that the requirements be halted.

“Weighing the harms these persons will suffer from leaving in place a legally deficient order against the disruptions to the State’s data-collection and education efforts due to vacatur renders a clear answer: the Arkansas Works Amendments cannot stand,” Boasberg wrote to conclude his ruling.

Some of the details differed in the Kentucky case, which had already been fought before Boasberg based on a previous version of the proposal. But in both cases, the judge arrived at the same conclusion: Medicaid work requirements cannot be allowed to stand.