The country’s top court could soon decide whether people should be required to prove that they are working or looking for a job in order to get taxpayer-funded health insurance.
The Supreme Court announced earlier this month that it would hear a case about the rules that Arkansas put into place for many of its Medicaid recipients. How the court decides the matter — along with the decisions of the incoming Biden administration — could determine what kind of conditions states can put on people covered by the program.
Arkansas Gov. Asa Hutchinson, a Republican whose administration approved the work requirements, praised the high court’s decision to take the appeal, calling the issue a matter of “national significance.”
“It has always been our goal to provide health care to an expanded population of Arkansans while also providing tools for them to achieve economic stability and independence,” he said.
The case will be closely watched in other state capitols. That’s because, starting in 2018, the Trump administration encouraged states to institute the work requirements, and more than a dozen tried to do so.
It was the first time the federal government had allowed those kinds of restrictions for the people on Medicaid, which is run jointly by states and the federal government. The Trump administration has since approved requests by 12 states to link the health insurance with work activities. Seven more states are still waiting for the green light from Washington.
But lower courts put the work requirements on hold in four states, including Arkansas. They sided with patient advocates who say the rules undercut the main purpose of Medicaid: to provide health insurance to people who cannot afford it.
Arkansas’ lawyers, though, say that the lower courts read the law incorrectly. They say that federal law gives the U.S. Department of Health and Human Services the flexibility to allow programs that promote healthy behaviors, not just expand health insurance coverage.
In 2018, Arkansas required people using the program to show that they were working, looking for a job, going to school or volunteering for 80 hours every month. But the state made exceptions. The rules did not apply to parents living with their children, pregnant women, full-time students or medically frail participants.
The state even tried to automatically help people show they were exempt from the new rules, says Judy Solomon, a senior fellow at the Center for Budget and Policy Priorities, a left-leaning think tank in Washington. But even with the protections, some 18,000 Arkansas residents lost their Medicaid coverage in seven months. That means one out of every four people who were subject to the work requirements.
Some of the people who lost coverage couldn’t get transportation to the jobs they needed to keep their insurance, Solomon says. Others didn’t have reliable Internet connections to help them fill out the necessary paperwork.
Making it harder for people to get Medicaid doesn’t make sense, she argues. A recent analysis by the Kaiser Family Foundation showed only 7% of people on the program were not working at all. Most recipients were either already working, were taking care of family members, were in school or couldn’t work because of an illness or disability.
Other safety-net programs do impose work requirements. But they either give out cash or benefits that could be re-sold. That’s not the case for Medicaid, Solomon notes. “You can’t cash out your benefit. You can’t buy anything with it. It’s there if you get sick,” she says. “And if we have ever seen the need for people to have that regardless of their life choices, we’re seeing it now.”
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Part of the reason that the Trump administration and many conservative states are moving to impose work requirements is as a reaction to the expansion of Medicaid under the Affordable Care Act.
Before President Barack Obama signed the law in 2010, Medicaid was limited to certain categories of recipients, including pregnant women, parents with children and people with disabilities. But Obamacare encouraged states to sign up childless, lower-income adults, too.
To conservatives, that changed the nature of the Medicaid program. Now, Medicaid is also a way of helping people establish their independence, says Dennis Smith, a senior Medicaid adviser for Arkansas who also led the federal Medicaid agency under President George W. Bush.
“If you live in poverty, you are at an increased risk for disease and premature death. So if poverty causes poor health, and poor health is related to poverty, shouldn’t we do something about it? That’s what we’re trying to do,” he says.
Work requirements give people incentives to find work, get higher-paying jobs or work more often, which will help the recipients in the long term, Smith says. He also argues that the lower courts stopped the work requirements too soon to tell if they were effective in the long run. The state’s data shows that many of the 18,000 recipients who lost their coverage initially later found insurance on their own, through their spouse’s plan or by re-enrolling in Medicaid.
Smith says he hopes the Supreme Court will reverse the lower courts’ decisions, not just to allow states to impose work requirements but also to make clear that the federal government’s secretary of health and human services has broad discretion to allow for experimentation in safety net programs. Those sorts of pilot programs have been used for decades by presidents of both parties to determine which kinds of approaches are effective, he says.
The Supreme Court is expected to issue a decision by the end of June. In the meantime, though, Smith will be working with Arkansas state lawmakers to make changes to its Medicaid requirements that will pass muster with the Biden administration. Arkansas’ current authorization for its tweaks to the Medicaid program expires at the end of 2021.
Smith says it’s too early to tell what Arkansas policymakers will propose, but that it will likely rely more heavily on incentives for recipients to find jobs rather than penalties.
“It gets back to a fundamental discussion of: What is the purpose of Medicaid?” he says. “If the purpose of Medicaid is to help people who are in poverty, that includes helping people get out of poverty.”
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