Michigan Medicaid Evaluation Has Important Lessons for States Considering Work Requirements

On Monday, a team of researchers from the University of Michigan (who are the official evaluators of the Healthy Michigan Plan) published a study in the Journal of the American Medical Association (JAMA) on the employment status of the adult Medicaid expansion population in Michigan. In a survey of 4,090 expansion adults, researchers found that approximately 49% of the Healthy Michigan Plan enrollees were either employed or self-employed, 5% were students, 2.5% were retired, and 4.5% were homemakers. Eleven percent described themselves as unable to work, and the remaining 27.6% were considered to be out of work.

These findings support other data that suggest that the majority of expansion enrollees are already working or in school, and that those who aren’t working suffer from a range of health challenges. The Michigan study illustrates the functional barriers to work that Medicaid beneficiaries face, and many of them result from physical and mental health challenges. This suggests to us that taking away their health coverage means that they are less likely to find work – not more so.

Almost three-quarters of expansion adults who were out of work in Michigan reported living with a chronic health condition. Chronic conditions included physical conditions (such as diabetes, asthma, and cancer) as well as mental health conditions. Furthermore, 24% of out of work adults reported a physical functional impairment, while 25% reported a mental functional impairment.

As regular readers of SayAhhh! know, a number of states are proposing work requirements through the Section 1115 demonstration waiver process. In these waiver proposals, work requirements are couched in the language of “personal empowerment” and touted as a means for beneficiaries to achieve long-term employment and eventually leave the Medicaid program. Looking at the Michigan data suggests a different chain of causality to us – a stable source of health coverage such as Medicaid is likely to assist people with their chronic mental and physical health conditions so that they they are better able to seek employment.

As the Michigan researchers also point out, the work requirements are targeted at a minority of those in the Medicaid expansion. This leads to another important question to which no state proposing a work requirement has provided a satisfactory answer so far. What are the administrative costs of establishing a complex work requirement system – especially on a per capita basis? How many vendors will be hired to do this, and at what cost? If there are savings to the state, they likely result from the loss of coverage – which leads to more uncompensated care costs and cost-shifting.

Joan Alker is the Executive Director of the Center for Children and Families and a Research Professor at the Georgetown McCourt School of Public Policy.