Opinion: Gov. Whitmer can limit red-tape impact

Bagenstos

Gov. Gretchen Whitmer will soon face one of the most consequential choices of her young administration. The lives and health of thousands of Michiganders are at stake.

The issue is the implementation of the Medicaid work requirement — one of the “parting gifts” former Gov. Rick Snyder and the Republican-led Legislature left Gov. Whitmer last year.

The Legislature, at then-Gov. Snyder’s prodding, agreed to continue to participate in the Affordable Care Act’s expansion of Medicaid, thus making health insurance available to people who earn up to 138 percent of the federal poverty level. But it took advantage of a new Trump administration policy and attached a condition: Those between ages 19 and 62 who receive Medicaid under the expansion must satisfy a work requirement.

Unless these individuals fit within an exempted category (such as pregnancy or “medical frailty”), they must work, participate in education or training or engage in a similar activity for at least 80 hours per month. If people fail to comply with the work requirement — or to sufficiently report their compliance with that requirement — for three months in a year, they will be thrown off the Medicaid rolls. Under Medicaid law, the state was required to seek a waiver from the federal government to implement this new condition on eligibility. Applying its new policy encouraging work requirements, the Trump administration approved the waiver in December 2018. The work requirement will take effect in January 2020.

Attaching a work requirement to Medicaid is terrible policy. Leave aside for a second the moral problems with the proposition that underlies such a work requirement — that, in the richest society in the history of the world, the penalty for failure to work should be avoidable illness and death. Medicaid work requirements fail even on their own terms.

The Kaiser Family Foundation has found that the overwhelming majority of non-elderly people who would be subject to these requirements either already work or face significant barriers to working. As a result, most of the people thrown off the rolls by work requirements will lose their health insurance because they failed to navigate through the “red tape” entailed in reporting compliance with the requirement — not because they actually were ineligible.

In addition, many poor people can find work only in jobs with irregular schedules. Through no fault of their own, they will fall below the 80-hour threshold in some months.

The harm of Medicaid work requirements falls especially heavily on people with disabilities. Although these requirements typically include formal exemptions for disabled individuals — as Michigan’s does — the exemptions do not reach all disabilities. Even when they qualify, people with disabilities are especially likely to be stymied in navigating the bureaucratic process of claiming and reporting an exemption. As I and other scholars have argued, Medicaid is particularly important in providing disabled people with the support necessary to work. Imposing work requirements on individuals with disabilities is likely to present a classic Catch-22: They cannot obtain Medicaid because they have not worked, but they cannot work without obtaining Medicaid.

These are not just theoretical concerns. Arkansas pioneered the new Medicaid work requirements. When that state implemented its policy last year, more than 18,000 people lost their health insurance. The vast majority appear to have been people who were either working or eligible for an exemption from the work requirement. Michigan’s new work requirement is likely to have an even more harmful impact. Under the law adopted by the Legislature last year, and the waiver submitted by Gov. Snyder and approved by the Trump administration, Michigan exempts far fewer people from the work requirement than does Arkansas. As the consulting group Manatt Health recently noted, “all individuals over age 49 [were] exempt in Arkansas, compared to those over age 61 in Michigan; anyone living with a child under age 18 is exempt in Arkansas, compared to caretakers of children under age 6 (limited to 1 parent at a time) in Michigan.”

Extrapolating Arkansas’s experience to Michigan’s population, and the much more limited exemptions in our work requirement, Manatt Health concluded that Michigan’s new requirement “could cause up to 27 percent of the state’s Medicaid expansion population to lose coverage within a year— an estimated 183,000 out of 680,000 people enrolled in the Healthy Michigan Plan.”

If more than 180,000 Michiganders lose their health insurance, they will be condemned to avoidable illnesses, medical complications, and even death.

During her time in the legislature, Gov. Whitmer was a leader in fighting against consequences like these. When Michigan first confronted the question whether to join the Affordable Care Act’s Medicaid expansion, then-Sen. Whitmer played the key role in rounding up the votes to sign on. Thanks to her rolling up her sleeves, doing the hard work and taking risks, 680,000 Michiganders have health care today who would not have before.

Gov. Whitmer must act now to protect that legacy. To be sure, her options are limited. Without a legislative majority, she cannot eliminate the new work requirement. The law adopted last year by the Legislature, and signed by then-Gov. Snyder, requires her to implement the work requirement as approved in the Trump administration’s waiver. For now, Gov. Whitmer is stuck with the work requirement. But she does have room to implement it in a way that blunts its worst harms. Indeed, if she makes the right choices, she could protect 70,000 or more Michiganders from being thrown off the rolls by that requirement.

The Arkansas experience demonstrates the major implementation problem with Medicaid work requirements: Whenever individuals who comply with or are exempt from those requirements must report their compliance or exemption, the difficulty in navigating a state’s bureaucracy will result in a large fraction of those individuals being erroneously thrown off the rolls. To solve this problem, exemptions from Michigan’s new work requirement must, so far as possible, be determined automatically by state officials — without any need for application or certification by the individual beneficiaries.

The waiver itself provides the basis for further automatic exemptions. It requires Michigan, “[p]rior to implementation” of the work requirement, to “[e]nsure the state will assess areas within the state that experience high rates of unemployment, areas with limited economies and/or educational opportunities, and areas that lack public transportation.” The state must assess those areas “to determine whether there should be further exemptions” from the work requirement so that it “will not be unreasonably burdensome for beneficiaries to meet.”

That provision of the waiver — which, remember, was issued by the Trump administration — gives Gov. Whitmer the basis for adding a new administrative exemption for Medicaid recipients in “areas with limited economies.” Such an exemption could substantially reduce the harm of the work requirement.

Gov. Whitmer’s courageous leadership is a major reason why Michigan expanded Medicaid in the first place. It’s time for her to show the same courage in protecting that legacy.

About the author: Samuel R. Bagenstos is law professor at the University of Michigan Law School, a member of the University of Michigan Institute for Healthcare Policy and Innovation and a former principal deputy assistant attorney general at the United States Department of Justice.

This guest commentary first appeared in Bridge Magazine, an online publication of the nonpartisan, nonprofit Center for Michigan.