Rural Health Policy Project

South Carolina Becomes First State to Impose Harmful Work Requirements Primarily on Poor Parents

I had held out a little sliver of hope that the Trump Administration would not cross this line but today those hopes were extinguished when CMS Administrator Verma traveled to South Carolina to personally deliver the news to South Carolina Governor McMaster that his state would be the first in the nation to apply a Medicaid work reporting requirement primarily to parents with children in the home.

This harmful policy won’t help parents get a job, but will put them and their children at risk of losing their health insurance. Similar waivers have been repeatedly struck down in federal court. In fact, the U.S. Court of Appeals is expected to rule any day in the Kentucky, Arkansas and New Hampshire cases – and all observers expect them to uphold the lower court’s ruling that HHS Secretary Azar’s Section 1115 waiver approvals were “arbitrary and capricious”.

As our report on an earlier version of the waiver showed, the families who will be disproportionately harmed are more likely to be households headed by women, African American, and living in rural areas. At a time when the nation’s uninsured rate for children is going up, the Administration is doubling down on this harmful and unlawful approach and specifically targeting families with children. 

As we routinely mention here at CCF, children are not exempt from harm’s way when their parents’ coverage is put on the chopping block — for many reasons.  First and foremost, when parents are uninsured, their children are much more likely to be uninsured as well. There may be considerable confusion about this new policy – and parents may assume that the whole family will lose coverage and not even apply. Second when a parent becomes uninsured, the economic security of the entire family is put at risk by the potential medical debt and even bankruptcy that can ensue. And finally, uninsured parents are at greater risk of having untreated medical conditions, such as depression, which can inhibit parent child bonding especially in those crucial first years. All of this is bad news for children.

Proponents will also no doubt point to an exemption for parents who are the “primary caregiver of a child, up to age 18, or a disabled adult”. That sounds like quite a loophole since that is by definition who this category of Medicaid coverage is. However, the terms and conditions of the waiver (STC #22 at p. 9) make clear that the parents themselves must report this and be granted an exemption – South Carolina’s computer will not automatically exempt them. This is key! The state of Arkansas used technology to exempt all parents with kids under 18 automatically – the parents didn’t have to take action so they will. For those who did have to take action in Arkansas the coverage loss ratio was more than 75%!

The second waiver approved today does include an expansion of parent coverage in South Carolina from 67 to 100 percent of the federal poverty line though these parents will not be eligible unless they can prove compliance with the work rules or receive an exemption before they are allowed to enroll. The second waiver also includes a coverage expansion to a small group of people who are homeless, justice involved or those needing substance abuse treatment modeled on Utah — but it appears these folks must also approve compliance with the work requirement before becoming eligible.

South Carolina’s second version of the application sought to gloss over the coverage losses with a fig leaf including Medicaid expansion to more children and pregnant women. All of those positives are NOT included in today’s waiver approval – in some cases deferred for further discussion about what can be achieved through a state plan amendment (kids and “unborn children”) and in some cases denied (12 months postpartum coverage for women and premium subsidies for those on Transitional Medical Assistance). This underscores what this maneuver is about – undermining Medicaid by adding impossible paperwork demands that will cause parents to lose coverage and stigmatizing those parents who rely on the program to meet their health care needs. We will have another blog to explain all of these nitty gritty details in the future.

CMS has been at this crossroads for some time, as I blogged about earlier this year, and I guess they wanted to wrap this one up before the holidays. Five more non expansion states have work reporting waiver applications pending (Alabama, Mississippi, Oklahoma, Tennessee and South Dakota). Today’s approval provides a road map for those states if they wish to use a similar “bait and switch” maneuver and modify their requests to couple an expansion for parents with a punitive work requirement.

As I have previously blogged about, the work requirements initiative is on the ropes – court challenges and the substantial coverage losses experienced in Arkansas have resulted in no state currently implementing. (Utah is on tap to go live on January 1st). Republican Governors in Indiana and Arizona recently put their approved work requirements on hold and Virginia’s Governor, following a Democratic sweep of the legislature, also put that state’s waiver request on hold.

The New York Times recently reported on Administrator Verma’s problems with recent disclosures of using taxpayer funds to hire image consultants and seeking taxpayer reimbursement for expensive stolen jewelry. Now it appears as though she’s following a familiar script to distract from the negative attention: Don’t admit defeat, ignore the facts and double down on failed policies — even if kids and families pay the price.

[Editor’s Note: CMS approved South Carolina’s Medicaid waiver with the following documents: Part 1 and Part 2.]

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.