How the debt ceiling debate could jeopardize health insurance for millions

WASHINGTON As Republicans and Democrats discuss a plan to raise the national debt ceiling, millions of Americans who rely on Medicaid for their health insurance have come under fire.

Republicans and Democrats appear to be deadlocked over a GOP proposal to tie eligibility for Medicaid, the government-funded health insurance program for low-income and disabled adults, to a certain number of hours worked each month. For Republicans, the plan is part of a decade-long push to link federal assistance to job requirements, while Democrats say the move would unfairly strip people of their health care coverage and push more Americans into poverty.

Under the Republican plan, included in a bill passed in the House last month, Medicaid beneficiaries would have to document 80 hours a month of work, which at the federal minimum wage would amount to a minimum of $580 a month in income, or record the hours perform community service or participate in a job training program. Beneficiaries would lose their coverage if they do not meet hourly or monthly income requirements for three consecutive months during the year.

A number of groups would be exempt, including people under 19 or over 56, those in school at least part-time, or who are pregnant or determined by a doctor to be physically or mentally unfit for work. Also exempt from the work requirement would be people in a drug or alcohol program and those caring for a dependent child or an incapacitated person.

The work requirement would apply to about 15 million of the 86 million people receiving Medicaid coverage who would have to meet mandated hours or apply for an exemption, the Congressional Budget Office estimated last month. Among that group, the CBO estimated that 1.5 million would likely become ineligible for federal Medicaid dollars under the Republican plan, reducing program costs by $109 billion over 10 years.

While those people would not qualify for federal Medicaid funding, states would have the option of using their dollars to keep people in the program, something the CBO estimates a number of states would do, keeping coverage for 900,000 people at a cost of about $65 billion. over 10 years. But the remaining 600,000 who live in states not expected to intervene would lose their health insurance entirely, the CBO said.

For those who lose coverage, they will still need medical care, and costs would have to be incurred elsewhere in the health care system, such as hospitals or health clinics that provide free or low-cost care, medical groups and health economists said. Six major medical groups, including the American Academy of Pediatrics and the American Psychiatric Association, issued a statement opposing Medicaid’s work requirements, arguing it would increase medical debt for patients and add barriers to care by raising costs for states and not by improving employment rates.

Health care problems don’t go away, they are still present, and if not addressed initially, can lead to further complications in the future, which will end up costing the health system even more, said Tochi Iroku-Malize, a family doctor. in New York and president of the American Academy of Family Physicians. Medicaid is critical to ensuring equitable access to care and reducing inequalities, and any cuts will exacerbate the health care inequalities we have and undermine access to care.

At the same time, health economists estimate that there would be additional administrative costs for states to set up a system for regularly tracking and monitoring people’s work hours since Medicaid is currently designed only as a health insurance program.

Republicans argued that the requirement would push more people into the workforce, help with labor shortages, improve people’s overall financial situation, and push them to work with private employer insurance. Conservative groups have attributed welfare reforms in the 1990s and other state-led work requirements for food and income assistance with increased employment by single mothers and lower child poverty rates.

What job requirements actually do, help people get a job. Every data point shows that and helps people move forward, House Speaker Kevin McCarthy, R-Calif, said Tuesday. He said including those labor provisions in a debt ceiling bill was a red line for him.

But there’s little evidence to suggest that job requirements for Medicaid beneficiaries would have an advantage, and Democrats said factors other than job requirements are largely responsible for the improved economic outcomes since they were introduced for the first time during the welfare reform in the 1990s.

Under an Arkansas program enacted in 2018 similar to the Republicans’ proposed Medicaid work requirement, 17,000 people lost coverage while there didn’t appear to be a significant change in the number of hours people worked, in part because more than 95 % of those targeted by the policy already met the requirement or should have been exempt, according to a study published in the New England Journal of Medicine.

The CBO also estimated that the program would do little to get more people into the workforce, saying it would have a negligible effect on employment status or hours worked by people who would be subject to job requirements.

The Medicaid proposal does not provide any additional funding for programs to help people find work, such as job training or transportation and child care assistance, and Medicaid dollars can only be used for health-related costs .

Taking away health insurance could also inhibit your ability to work, past research has found.

When people lose coverage they still need to get health care, said Robin Rudowitz, program director on Medicaid and the uninsured at KFF, a health research nonprofit. Often coverage and access to medication or ongoing treatment for chronic conditions helps people work, so if people lose coverage and lose access to medication that controls things like asthma or heart conditions and stuff such, this impedes their ability to work.

The requirements could also threaten coverage for people who work the required hours or should be waived if they aren’t clearly communicated and reporting is too onerous, said Laura Harker, senior policy analyst at the Center for Budget and Policy Priorities. .

Communicating new requirements with Medicaid beneficiaries has proven particularly difficult in the past, with a significant proportion of recipients unable to be reached by mail because they are homeless or in temporary housing or lack regular access to the Internet. This could result in people who are eligible for an exemption, such as those who have a disability or are caring for a child, losing coverage because they have failed to comply with the proper reporting obligation.

A study of the Arkansas plan found that one-third of people subject to the policy had not heard of it and 44 percent of the target population were unsure if the requirements applied to them.

It just creates a lot of red tape for people who are mostly already working, and it doesn’t really help increase employment, Harker said. It really just creates an added burden for people to go through, not even really helping them if they’re looking for work to really boost their prospects there. So it really fails in every way.