Low-Income Parents at Significant Risk Under the House-Passed Medicaid Work Reporting Requirements in Debt Ceiling Bill

We’ve been closely reading Section 321 of the House-passed debt ceiling bill which would establish a pernicious new maze of red tape to trip people up and cause them to lose Medicaid coverage. While posing as a “work requirement”, this is really a plan to make people jump through more hoops in order to keep their health coverage.

We saw this movie in Arkansas in 2018 and it was a horror show that flopped badly and does not merit a sequel.  Here’s the plot summary from 2018: Due to red tape from the new work reporting requirements, 18,000 people lost coverage — 23 percent of those in the age group affected — and faced more medical debt and barriers to needed care with no discernible impact on employment. Clearly many people that were supposed to be exempted were not – since subsequent research found that 97% met the rules or exemptions.  In fact, if anything, these so-called “work requirements” pushed people out of the workforce as employment rates actually declined. Promotion of these damaging work reporting requirements was a central focus of the Trump Administration’s Section 1115 waiver policy.  Arkansas was the only state that actually implemented the policy, as federal courts quickly stepped in to halt Arkansas’ work reporting requirements and stop other states from moving forward because they were fundamentally incompatible with Medicaid’s purpose to provide affordable, comprehensive health insurance to vulnerable populations.

Proponents of this 2023 work reporting provision frequently bandy about the misleading claim that only childless adults who are “able-bodied” would be subject to these new administrative hurdles. While the bill includes a list of those who “couldqualify for an exemption, my colleague Leo Cuello, for example, has already clearly explained how people with disabilities, including those on SSI, would be subject to the work reporting requirements as they would not be explicitly exempted.  As a result, they would be at serious risk of losing their Medicaid coverage and forgoing needed care. Moreover, despite an exemption in the bill for “the parent or caretaker of a dependent child,” low-income parents are also at significant risk.

As we have previously written, the work reporting requirements in the McCarthy bill apply broadly across the Medicaid population, not just to those covered under the Medicaid expansion.  Importantly, there is no requirement that states automatically implement any exemptions, including for parents (and the proposal certainly does not provide any funding to states to set up systems to automate the exemptions). And of course, even if some states try to automatically exempt certain groups or individuals, there is no guarantee that some exempt individuals won’t end up falling through the cracks, fail to meet work reporting requirements and end up uninsured. For parents who live in a state that does automatically exempt parents without a hitch, there is no discussion in the bill of how individuals would seek exemptions and how they would demonstrate they qualify for them, or how they would prove they meet the work reporting requirements. And as we know from the dismal Arkansas experience, most people in Arkansas were confused about what the requirement was and whether it was in place or not, let alone whether they qualified for an exemption and how to get one.

In addition, when the Trump Administration made clear that punitive Medicaid work reporting requirements were a top priority for section 1115 waiver policy, numerous states responded favorably (even though eventually federal courts correctly found that they violated the objectives of the Medicaid statute as required under section 1115.) Notably, some of the states seeking work reporting requirement waivers explicitly proposed to apply them only to parents. In fact, at the time, six non-expansion states — Alabama, Mississippi, Oklahoma, South Carolina, South Dakota and Tennessee — sought Section 1115 waiver authority just to apply work reporting requirements to extremely poor parents that they are required to cover by federal law. (Two of those states — Oklahoma and South Dakota — have subsequently implemented the expansion or will soon.)  And other states seeking to impose work reporting requirement waivers, of course, could have chosen to exempt all parents but did not always do so – or exempted only parents of young children.

There are not just historical examples. Right now, under a deeply troubling judicial decision, Georgia is moving ahead this summer with its Section 1115 Medicaid waiver that includes a very limited coverage expansion (that falls far short of the full Medicaid expansion) along with a work reporting requirement. There is no exemption for parents of dependent children of any age at all.

As a result, there is ample evidence that if the work reporting requirements in the House-passed debt ceiling were enacted into law, some states will seek to fully or partially eliminate the exemption for parents through Section 1115 waivers.  And especially if there is an Administration in place that is hostile to Medicaid, those waivers are likely to be approved quickly without the need for favorable decisions from the courts.

So, one can’t assume that low-income parents will be protected from the work reporting requirements under the House-passed debt ceiling bill, even with an exemption for parents with dependent children. We know that many people, including parents, who otherwise should qualify for exemptions, may not get them and as a result, they may lose their Medicaid coverage and access to needed care. That risk will be even more magnified if, as is likely, states try to move forward with Section 1115 waivers to explicitly apply onerous work reporting requirements to low-income parents should work reporting requirements actually become law.