As highlighted on Say Ahhh! earlier this month, Congress continues to consider imposing work reporting requirements on people who get their health coverage through Medicaid. As a practical matter, one thing is clear: the only purpose of this proposal is to terminate Medicaid coverage for the most vulnerable Americans. Work reporting requirements in public benefit programs have never led to more people working, but rather to widespread loss of coverage. This is the only way budget “savings” could be realized, especially as states would be forced to spend funds to develop or enhance administrative systems to comply with new restrictions and avoid cutting off coverage who meet the requirements or area exempt. (Revisit the chaos that ensued during the Medicaid unwinding to see what could go wrong for people who remain eligible.)
Despite claims from policymakers that they have learned lessons from failed experiments in other programs, there is simply no way that all individuals who are truly exempt from work reporting requirements would not lose their coverage. One population at the greatest risk for loss of coverage is people with substance use disorders. Approximately 2 in 5 nonelderly adult Medicaid enrollees have a substance use disorder or mental health condition, and Medicaid provides a wide array of prevention, treatment, and supports for people with these conditions that save lives, with a significant return on investment.
A number of existing and pending public benefit work reporting requirement policies attempt to exempt people who are actively participating in a drug or alcohol addiction treatment program, such as the Supplemental Nutrition Assistance Program (SNAP)1and the pending 1115 demonstration waivers in Ohio and Arizona. The federal SNAP exemption is limited to individuals who are participating in private, non-profit treatment facilities and community mental health centers, which make up less than half of the substance use disorder treatment facilities in the U.S., and are not equally distributed across the country. States have interpreted this requirement in dramatically different ways, where some only include acute full-time treatment while others have no minimum hour requirements.
In addition to the limited number of substance use disorder treatment programs that meet the statutory definition to permit a work reporting requirement exemption, the reality is that the vast majority of people with substance use disorders do not receive treatment. Even with a concurrent work reporting requirement exemption for people with substance use disorders who are “unfit to work,” there would still be a need for people to see a provider to get proof of this “unfit” status. As Joan Alker noted, these types of exemptions could require significant paperwork burdens on clinicians, and force these providers to make decisions about their patients that could have life-or-death consequences.
Importantly though, this perverse incentive is not limited to clinicians. Average spending for Medicaid members with a substance use disorder diagnosis is more than twice as high as spending on those without this diagnosis. As states try to control costs in Medicaid, particularly with other proposed cuts to Medicaid such as a reduced federal match for the expansion population, they may be incentivized to make it harder for people to access substance use disorder treatment if that means people with these conditions would lose their coverage and state Medicaid programs would no longer incur costs for this or other treatment (although individual medical debt and uncompensated hospital costs would increase). States or Medicaid managed care organizations could lower reimbursement rates for providers, limit the number of providers who can participate in their networks, or deny medically necessary care to make it harder for people with substance use disorders to access the treatment they need. While any of these strategies would be illegal under the Mental Health Parity and Addiction Equity Act, the U.S. Department of Health & Human Services Office of Inspector General found that there has been widespread noncompliance with this law across states. Essentially, rather than protecting people with substance use disorders, this type of exemption could lead to more discrimination.
At the same time, people who need substance use disorder treatment would face even more barriers to treatment than they already do. Individuals who do not meet the work reporting requirement because of their substance use would not be able to go to a provider to get that diagnosis or a referral to an appropriate treatment facility. They may need other treatment first, before they can address their substance use, which they may not be able to pursue if they cannot meet the work reporting requirement and get Medicaid coverage. Many people with substance use disorders have co-occurring mental health conditions or other physical health conditions that may have been exacerbated by their substance use, but they would not be able to access those other treatment programs if only addiction treatment programs are exempted from the work reporting requirements.
And what happens once a Medicaid member completes their addiction treatment program? Due to widespread stigma and discrimination against people with substance use disorders, or even a history of the condition, they still face significant barriers to finding and maintaining a job, and then they would lose access to all of their other health care services and supports that are available through Medicaid.
A “health institute” led by a former Trump appointee claims that Medicaid is not the appropriate source of funding to address the overdose epidemic, and that grant funding should be used instead (despite the Administration’s simultaneous efforts to cut this funding and reduce the federal workforce that facilitates these grants). Grant funding serves an important role for addiction and recovery supports, largely because they have been so woefully underfunded for far too long. However, federal grants accounted for only about $4 billion in spending on substance use disorders in 2023, compared to Medicaid’s $29 billion. Ultimately, grants are not a long-term sustainable solution to ensuring broad access to prevention and treatment for a health condition. Health insurance is. And this stigma-based argument ignores the reality that substance use disorders are health conditions, and should be treated as no less.
Ultimately, even with the best of intentions, work reporting requirements won’t work for people with substance use disorders. The U.S. is finally seeing a decrease in overdose deaths, but we are still losing close to 100,000 lives every year. Now is not the time to impose barriers to affordable health care for the most vulnerable Americans.
- Notably, the federal SNAP requirements also allow states to receive place-based waivers to exclude regions from the work reporting requirements when there is a high unemployment rate or an insufficient job market, which every state and DC has received at some point in the last two decades. ↩︎
— Deborah Steinberg, Senior Health Policy Attorney at Legal Action Center