Los­ing Med­i­caid: a so­cial ex­per­i­ment

Arkansas Democrat-Gazette - - PERSPECTIVE - DOUG BADGER AND GRACE-MARIE TURNER REALCLEARHEALTH Doug Badger is Se­nior Fel­low and Grace-Marie Turner is Pres­i­dent of the Galen In­sti­tute, a non-profit re­search or­ga­ni­za­tion fo­cus­ing on pa­tient­cen­tered health re­form. This com­men­tary orig­i­nally ap­peared

Arkansas is in cri­sis. At least that’s what sev­eral ad­vo­cacy groups and main­stream pub­li­ca­tions say.

Kevin De Liban of Arkansas Le­gal Aid calls the state’s new re­quire­ment that able-bod­ied Med­i­caid re­cip­i­ents work or seek work “dis­as­trous.” The Med­i­caid and CHIP Pay­ment Ad­vi­sory Com­mis­sion, a group that ad­vises Congress on Med­i­caid is­sues, pro­nounced it­self “highly con­cerned” about the pro­gram and urged the HHS Sec­re­tary to “pause” the dis­en­roll­ment of re­cip­i­ents who fail to meet the work re­quire­ments. The left-lean­ing Cen­ter for Bud­get and Pol­icy Pri­or­i­ties charged that the pro­gram was caus­ing “harm to ben­e­fi­cia­ries.”

It pro­claimed that the “sud­den health cri­sis has rung alarms in Wash­ing­ton.” Not to be out­done, Politico re­ported that the state is con­duct­ing an “un­prece­dented so­cial ex­per­i­ment” that is “throw­ing thou­sands of peo­ple off its Med­i­caid rolls.” State of­fi­cials are “blind­sid­ing vul­ner­a­ble res­i­dents” who are “pan­icked about los­ing their health cov­er­age.”

What pro­duced this hor­ror? Be­gin­ning last June, the state re­quired non-dis­abled child­less adults ages 30-49 to en­gage in 80 hours of workre­lated ac­tiv­ity each month. Those who failed to do so for three con­sec­u­tive months were dropped from the pro­gram through the end of 2018.

Nearly 17,000 re­cip­i­ents lost their ben­e­fits be­tween Septem­ber and De­cem­ber. All be­came el­i­gi­ble to reen­roll in Med­i­caid on Jan. 1. Fewer than 1,000 did. Cri­sis in­deed.

The “so­cial ex­per­i­ment,” con­trary to press re­ports, isn’t en­tirely with­out prece­dent. Arkansas is one of seven states that have ob­tained per­mis­sion from the Trump Ad­min­is­tra­tion to es­tab­lish work re­quire­ments in its Med­i­caid pro­gram. The ad­min­is­tra­tion is cur­rently re­view­ing sim­i­lar waiver ap­pli­ca­tions from an ad­di­tional nine states. Nor are these re­quire­ments unique to Med­i­caid. They are sim­i­lar to those in other pub­lic as­sis­tance pro­grams.

Of the nearly 65,000 Med­i­caid re­cip­i­ents sub­ject to Arkansas’ work re­quire­ments in Novem­ber, most did not have to re­port their work ac­tiv­i­ties be­cause they were meet­ing re­quire­ments in other wel­fare pro­grams. Thou­sands more were ex­empt be­cause they had a de­pen­dent child or med­i­cal is­sues. In all, nearly 55,000 re­cip­i­ents were not obliged to re­port.

A to­tal of just over 8,400 re­cip­i­ents who were re­quired to re­port their work ac­tiv­i­ties in Novem­ber fell short. Of those, more than 8,308 (98 per­cent) re­ported no work ac­tiv­ity at all—they nei­ther had a job, sought one, nor en­deav­ored to de­velop the skills to get one. Novem­ber marked the third con­sec­u­tive month that more than 4,600 of these re­cip­i­ents failed to meet the re­quire­ments. They were re­moved from the rolls. That brought the to­tal num­ber of Arkansans who lost Med­i­caid cov­er­age for fail­ing to meet the work re­quire­ments in 2018 to just un­der 17,000.

All were el­i­gi­ble to re­join the pro­gram Jan. 1. Only 966 did, ac­cord­ing to the most re­cent statis­tics re­leased by the state’s Depart­ment of Hu­man Ser­vices.

That may not be as counter-in­tu­itive as it may at first seem. Since they didn’t value the ben­e­fits enough to com­ply with its work re­quire­ments— or, in the over­whelm­ing ma­jor­ity of cases, re­port any work ac­tiv­i­ties at all—it is hardly sur­pris­ing that most didn’t bother to re-en­roll.

Health pol­icy an­a­lysts have long been puz­zled that mil­lions of unin­sured peo­ple snub the govern­ment’s of­fer of free health ben­e­fits. The Kaiser Fam­ily Foun­da­tion es­ti­mates that seven mil­lion of the 27.5 mil­lion nonelderly peo­ple who were unin­sured in 2016 were el­i­gi­ble for Med­i­caid. That’s more than one-fourth of the unin­sured pop­u­la­tion. An­other eight mil­lion were el­i­gi­ble for Oba­macare pre­mium sub­si­dies, mean­ing that more than half the nonelderly unin­sured didn’t avail them­selves of govern­ment-sub­si­dized health cov­er­age.

Aca­demic re­search sug­gests one pos­si­ble rea­son: Med­i­caid re­cip­i­ents aren’t the pri­mary ben­e­fi­cia­ries of the pro­gram’s spend­ing. A study of the Ore­gon Health In­sur­ance Ex­per­i­ment, which pro­vided Med­i­caid cov­er­age to ex­pan­sion adults on a ran­dom­ized ba­sis, found that the pro­gram’s “wel­fare ben­e­fit to re­cip­i­ents per dol­lar of govern­ment spend­ing range from about $0.2 to $0.4.” That means $1 of Med­i­caid spend­ing pro­vides around 20 to 40 cents of ben­e­fits to re­cip­i­ents. The rest—an es­ti­mated 60 cents of ev­ery Med­i­caid dol­lar—ben­e­fits “ex­ter­nal par­ties,” most likely hos­pi­tals that use the money to cover un­com­pen­sated med­i­cal costs.

The rea­son so many Med­i­caid re­cip­i­ents failed to com­ply with the Arkansas work re­quire­ment may be as sim­ple as this: They didn’t con­sider the ben­e­fits worth the ef­fort.

Crit­ics of the pro­gram tell a dif­fer­ent story. They al­lege that the state failed to in­form at least some re­cip­i­ents of the re­quire­ments and that the on­line por­tal re­cip­i­ents use to re­port work ef­forts is con­fus­ing and un­re­li­able. One re­cip­i­ent who is su­ing the state told Politico that let­ters no­ti­fy­ing her of the work re­quire­ments were sent to the wrong ad­dress. Whether that is the state’s fault is un­clear. Arkansas has long re­quired re­cip­i­ents to re­port ad­dress changes. Those who fail to do so are re­moved from the rolls for rea­sons hav­ing noth­ing to do with work re­quire­ments.

Politico does note that more than 3,800 re­cip­i­ents have found jobs since the re­quire­ments took ef­fect in June. That is less than one-fourth the num­ber who have been dis­en­rolled for not work­ing, but a pos­i­tive sign none­the­less.

A study by the Buck­eye In­sti­tute, an Ohio-based free mar­ket think tank, found that peo­ple who fa­vor­ably re­spond to work re­quire­ments will earn far more—in some cases nearly $1 mil­lion more—over the course of a life­time than those who re­main on Med­i­caid and don’t in­crease their work ef­forts. Work re­quire­ments ben­e­fit re­cip­i­ents.

Op­po­si­tion to those re­quire­ments, in any event, doesn’t arise from what Politico al­leged is “a night­mar­ish, con­fus­ing ex­pe­ri­ence with clunky tech­nol­ogy.” The pro­gram would be con­tro­ver­sial even if it were tech­no­log­i­cally flaw­less.

The op­po­si­tion is based on ide­ol­ogy, not tech­nol­ogy. And it cuts both ways.

The pro­gram has put lib­er­als and con­ser­va­tives alike in un­com­fort­able po­si­tions. The left strongly sup­ports Med­i­caid ex­pan­sion but re­gards work re­quire­ments as an act of state-spon­sored cru­elty. The right sup­ports work re­quire­ments but op­poses Med­i­caid ex­pan­sion. Many con­ser­va­tives fear that work re­quire­ments will make ex­pan­sion more palat­able in the 14 states that have so far re­sisted it.

Arkansas is caught in this po­lit­i­cal co­nun­drum. Gov­er­nor Asa Hutchin­son, a Repub­li­can, sup­ports the Med­i­caid ex­pan­sion he in­her­ited from his pre­de­ces­sor. But he also be­lieves that able-bod­ied re­cip­i­ents should work, or at least pur­sue the train­ing and skills they need to hold a steady job.

Each year, three-fourths votes are re­quired in the state’s House and Se­nate to ap­prove fund­ing for the ex­pan­sion. That leads to “al­most an­nual cliffhanger votes” over whether to re­peal the ex­pan­sion, ac­cord­ing to Politico.

If Arkansas’ over­whelm­ingly Repub­li­can leg­is­la­ture votes again to fund an ex­pan­sion that con­ser­va­tives de­test, it will be at least partly be­cause of work re­quire­ments lib­er­als ab­hor.

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