Medicaid is a critical part of health insurance coverage in the US, covering millions of children and their parents, seniors and individuals with disabilities. More than half of states have taken the Affordable Care Act option to expand Medicaid coverage to more low-income parents and childless adults. But some states are trying to move in the opposite direction — not only turn down the option to expand coverage, but put obstacles in the way of very low-income parents who are eligible for Medicaid coverage on a mandatory basis.
Kansas and Mississippi have some of the lowest income eligibility limits for parents in the country, tied for 43rd and 48th in the nation, respectively[1]. These states are the latest to propose a work requirement as a condition of eligibility for Medicaid. They join Maine as the first states to propose a work requirement for parents in states that haven’t taken the Medicaid expansion and are not proposing any coverage expansion at all.[2]
In 1996, Congress required states to maintain Medicaid eligibility for any family that would previously have qualified for cash assistance. Some states had increased this income limit even before the Affordable Care Act’s enhanced match to cover parents and other adults to 138 percent of the federal poverty line, but other states – including Kansas and Mississippi – have kept extremely low-income eligibility limits.
The proposals put forth by Kansas and Mississippi would allow the state to take away health insurance coverage from these very poor parents if they are not working or participating in a related activity. From other programs, we know that such requirements result in many people losing benefits — including people with disabilities or those facing health crises. People who are working are likely to lose benefits when their hours of work fluctuate, or if they fail to turn in the needed paperwork in time.
These families are living in deep poverty and already facing many challenges. Housing instability is very high in this income bracket – if families aren’t literally homeless they are often doubled up with family or friends and living on the edge.
Using the numbers provided in the Mississippi application, we estimate that enrollment will decline by approximately 5,000 persons in the first year of the demonstration. We assume the decrease in enrollment is either because individuals now enrolled will be disenrolled, or because individuals who would otherwise enroll will not do so because they cannot meet the work requirement or are deterred by it. The waiver makes no provision for alternate coverage for these individuals, who are likely to be uninsured. A spokesperson for the Mississippi Department of Medicaid estimated that, after applying all exemptions, about 15,000-20,000 individuals would be required to work. Kansas, meanwhile, estimates that 12,000 individuals will be required to fulfill the work requirement.
While Kansas may claim to protect children by exempting them from the work requirement (yes seriously!), the reality is that these rules will hurt children as well as their parents. Parents’ health insurance status directly affects their children. When parents are insured, children are more likely to be insured and also more likely to receive well-child visits. Insurance also provides one bit of financial security for these vulnerable families – and for the very poor families affected by these proposals, taking away access to affordable health care from parents will likely make it harder for families to climb out of poverty.
Even more shocking, Kansas also proposes to limit these parents to 36 months of coverage in their lifetime, regardless of whether people are complying with the work requirement. This could result in people being cut off in the middle of treatment for cancer or other chronic conditions like depression, which is epidemic among very poor mothers.
It’s a no-win situation for low-income Kansans and Mississippians. In Kansas, if they are poor enough to qualify for Medicaid they can only keep that coverage for three months without working. In both Kansas and Mississippi, once they start working (assuming there are jobs available and they have affordable child care and transportation) they will soon earn too much to qualify for Medicaid (but probably not enough for tax credits to help buy private insurance — eligibility for these doesn’t kick in until income exceeds the poverty level). Families in this slice of the income range are eligible to receive Transitional Medical Assistance (TMA), which extends Medicaid coverage for at least six months as the family income increases due to earnings. As parents are able to work more hours or find higher paying opportunities, TMA provides the families with a stable source of health coverage when private insurance is still out of reach. Both proposals apply the work requirement to TMA recipients, and as such add the undue burden of monthly verification onto parents who are already in all likelihood meeting the work requirement.
If the Centers for Medicare and Medicaid Services (CMS) approve these waivers, the states will have to grow their state governments and create entirely new systems of red tape to implement the work requirements and time limit. In Kansas, it’s estimated that 12,000 parents will be subject to the work requirement. This is only about three percent of the entire Medicaid caseload, but it will consume a disproportionate amount of administrative resources. Of course, we may never know how much — as administrative costs are not included in Section 1115 budget neutrality assessments. Both states should be transparent about the costs associated with the creation of a new government bureaucracy to monitor barriers to care for three percent of the Medicaid caseload. Ironic since as the Mississippi proposal basically says, this is about saving money (by kicking people off the program).
For the first time in history CMS has indicated its intent to approve work requirements for Medicaid. Several states have proposed work requirements, and while all these proposals are short-sighted and ill-conceived, Kansas and Mississippi’s reach a new low by targeting very poor families. And these proposals are simply tone deaf to the reality of low-wage work in America: most low-wage jobs do not come with affordable employer health benefits. If approved, the consequences to the poorest families will be harsh and unprecedented. CMS should swiftly reject such ideas.
Suzanne Wikle is with the Center for Law and Social Policy (CLASP), a national, nonpartisan, nonprofit organization advancing policy solutions for low-income people.
[1] In order to qualify for Medicaid non-disabled adults in Kansas with dependent children must have income below 38 percent of the federal poverty level ($7,759 per year for family of three), and in Mississippi below 27 percent of the poverty level ($5,540.40 per year for a family of three).
[2] It is worth noting that Maine voters recently voted in a ballot referendum to expand Medicaid.