CMS Weighing Decision that Would Lead to Loss of Health Coverage for Thousands of Tennessee Families Living in Poverty

Tennessee, a state that has not accepted the option to expand Medicaid to more low-income adults, has become the fifth state to ask CMS to impose a work or community service reporting requirement on parents with incomes at or below 98% of the federal poverty level. South Carolina is next in the queue.

If the federal government approves the waiver, the state would be able to terminate Medicaid coverage for parents who do not successfully navigate a new bureaucratic maze to report 20 hours a week of work or related activities – education, job training or volunteering – every month. Parents will be sanctioned if they don’t meet the minimum number of hours at least every four out of six months. Some might lose coverage because they don’t meet the requirement, but others would lose coverage simply because they are unaware of the new rules and how to comply with them.

This disturbing development follows CMS guidance, released about a year ago, that announced the agency’s interest in approving state proposals to impose work reporting requirements on Medicaid beneficiaries. As readers of SayAhhh! know, we have been following these waivers closely, especially in Arkansas the first state where implementation has gone forward.

Today we released a report with the Tennessee Justice Center to explain what this proposal would mean for Tennesseans. In states like Tennessee that have not expanded Medicaid, these proposals target families with children only – and those families with children are some of the most vulnerable in the country with very low incomes. In Tennessee these are families with incomes below 98% of the poverty line – with annual incomes below $21,000. While proponents of these new rules rarely say so, parents are the only adults subject to the plan.

Supporting very poor mothers and helping them to find work is a good objective. But this proposal is not likely to achieve that goal.  Additional federal funds are not available to address the real barriers very poor parents face such as a lack of affordable child care, transportation, etc. Moreover, research from Ohio and Michigan has found that Medicaid coverage acts as a work support. Taking Medicaid away makes people less likely to be able to work, not more.

As we know from research on other programs and the experience of Arkansas, the practical effect of Tennessee’s proposal will be to take away Medicaid coverage from very poor parents – either because they get tripped up in a bureaucratic maze and don’t get an exemption they are supposed to or because they fail to comply with the new work requirement – which may be because they are simply unaware of it.

This is not idle speculation but reinforced by data released by the state of Arkansas. In Arkansas, 23 percent of those subject to the new reporting rules have lost their health insurance. There is little reason to think Tennessee will do better than Arkansas – in fact the state may do worse. In Arkansas all parents are exempt whereas in Tennessee they are not – in fact they cannot be since the proposal is directed exclusively at parents. Parents by definition face additional barriers to work because they have children in the home that need care. And the state of Tennessee is particularly ill-equipped to handle this new reporting burden because its eligibility system is one of the worst in the nation.

If Tennessee has results similar to Arkansas, approximately 68,000 parents in Tennessee can be expected to lose their health insurance. The vast majority of those parents are likely to become uninsured. An offer of affordable health insurance is rare in low wage jobs; in Tennessee only 15% of adults living below the poverty line have employer-sponsored insurance.

Who are these families?

Our analysis found that more than three quarters (77 percent) are mothers, 33 percent of these parents are under age 30. They are most likely to be White (64 percent) but African Americans are disproportionately represented (28 percent). About 46 percent report they are already working; 42 percent are not now in the workforce, often because they are caring for someone else or have an illness or disability; 12 percent describe themselves as unemployed.

Rural communities and small towns are likely to be hit especially hard by coverage losses, because they have higher proportions of adults on Medicaid. The paper has a list by county of adult enrollment in Medicaid. This coverage loss will further undermine the viability of rural hospitals and other providers in those areas as those that are uninsured wind up in the emergency room with no source of insurance. The four counties that have among the highest unemployment rates and among the highest adult Medicaid enrollment rates are: Lake, McNairy, Bledsoe and Lauderdale.

Children will also be harmed if parents lose coverage. Research is clear that having an uninsured parent raises the risk of the children being uninsured as well. This is particularly troubling news in Tennessee, which according to a report we released here at Georgetown a few months ago, is one of nine states nationwide that saw a statistically significant increase in the number of uninsured children in 2017, rising from 58,000 to 71,000 – an increase of 13,000.

Not only are more children likely to become uninsured if parents become uninsured, there are other problems as well. If any member of a family becomes uninsured the entire family is at risk for medical debt and even bankruptcy – moving these families in the opposite direction of economic self-sufficiency. Families at this income level already experience very high levels of homelessness and residential instability as well as higher rates of health problems.

And a healthier parent is a better parent. For example, Medicaid has been shown clearly to reduce the incidence of depression and maternal depression is epidemic among very low- income women. This inhibits parent-child bonding in the critical early years of development.

As Michele Johnson, executive director the Tennessee Justice Center, stated:

“This misguided policy will add red-tape, take away health from parents and caregivers and put rural hospitals at greater risk of shutting their doors. When parents lose health coverage, children are less likely to have their health care needs met and the whole family could fall further into poverty.”

Mary Graham, president and CEO of the United Ways of Tennessee said:

“This waiver would have a devastating impact on our communities. It will be even tougher for rural hospitals to keep their doors open. Based on what we’ve heard from United Ways in neighboring states, the bureaucracy around these work reporting requirements will harm many, especially mothers, children, rural Tennesseans and our veterans.”

Tennessee’s proposal is currently open for public comment with the federal government until February 7.

Joan Alker
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