Recently the Trump Administration opened the door to serious new restrictions on Medicaid by announcing they would allow and encourage states to impose employment and other “community engagement” requirements on working-age adults. Ten states have already submitted requests to do so, although just one state, Kentucky, has been approved so far.
Oklahoma lawmakers might be tempted to follow suit. They shouldn’t be. Most Medicaid-eligible adults who can work already do, and most of the rest have barriers to employment that a work requirement won’t fix. Restricting Medicaid with a work requirement would create expensive new bureaucracy and prevent Oklahomans from getting important care without paying off in any significant savings for the state.
Most Medicaid members who can work already do
Medicaid is how we guarantee basic health access for low-income Americans so they can get the care they need. As states and the federal government share the cost, some states want to reduce their spending by requiring adult members to hold jobs or be actively looking for work, be in school or job training, or be volunteering in order to get and keep their coverage. However, this effort ignores a basic fact about adults on Medicaid: most who can work already do.
Adult Medicaid eligibility varies significantly by state. The 32 states that have expanded coverage through the Affordable Care Act typically cover a greater share of childless, nondisabled adults, while those that haven’t, like Oklahoma, generally restrict their programs to children, the elderly, people with disabilities, and very low-income parents. Nationwide, 6 in 10 adult Medicaid members who could reasonably be expected to be subject to a work requirement did work, and nearly 8 in 10 (79%) lived with another working adult. As Medicaid eligibility for adults generally cuts off at just above the poverty line, this shows that employment isn’t enough to stay out of poverty.
Oklahoma’s Medicaid data bears this out. SoonerCare coverage for nondisabled adults is restricted to the very low-income parents or caretakers of dependent children, and these adults make up less than 10 percent of SoonerCare enrollees. Among this group, fully 85 percent are or were recently employed, outpacing workforce participation of their counties as a whole. Any work requirement efforts in Oklahoma would in effect be targeting 15 percent of this 10 percent of SoonerCare members – just 12,000 of the 800,000 Oklahomans on SoonerCare per month.
For Medicaid members who don’t work, work requirements won’t address barriers to employment
Medicaid members who don’t work face barriers to employment that a work requirement won’t fix. Nationwide, research shows that nonworking adult Medicaid members fall into the following categories:
Illness or disability
Thirty-six percent of nonworking adult Medicaid members aren’t working due to a chronic health issue or disability, which can range from depression to autism. Individuals who qualify for Medicaid on the basis of a Social Security disability determination are automatically exempt from any federal work requirements, but most people with disabilities do not qualify for Social Security, due to the strict criteria. Even if the individual is unable to maintain employment due to their disability, they still might not qualify for Social Security. In addition, Social Security determinations take a long time to process – often years in which the individual is unable to work but lacks the documentation needed for an exemption.
It should also be noted that Social Security determinations require extensive medical evaluations, creating a catch-22: without Social Security, you may not be eligible for an exemption, but you can’t get that exemption without access to health care. States implementing work requirements should be able to screen for these individuals, but this would require expensive new bureaucracy and would virtually guarantee that some people with disabilities, particularly people with developmental or cognitive disabilities, may slip through the cracks and lose their health care as a result.
Thirty percent of nonworking adult Medicaid members report that responsibilities to home and family prevent them from working. These individuals don’t need a work requirement to motivate them to find work. Instead, they need access to affordable child care and elder care – the same services Oklahoma has repeatedly cut due to budget cuts.
Going to school
Fifteen percent of nonworking adult Medicaid members are in school, which can include high school, university, vocational training, etc. These individuals are actively trying to make themselves more employable – but that may mean they can’t work now. While they should be exempt from work requirements, in practice this depends on their ability to obtain documentation from their university or education program, which may be contingent on paying all fees or other bureaucratic processes.
Nine percent describe themselves as retired. This may include older adults for whom earlier injury or health condition led them to drop out of the workforce.
Not able to find work
Six percent report being unable to find work. This may be because individuals don’t have the skills necessary to be hired; have a criminal record; or simply don’t live somewhere with jobs available.
Only three percent non-working adult Medicaid enrollees do not fit into one of these categories – a tiny number that is clearly not what is driving Medicaid costs for states.
In short, when it comes to encouraging low-income Oklahomans to seek employment, work requirements are a remarkably ineffective tool. History bears this out. In the 1990s, federal “welfare reform” imposed work requirements for basic cash assistance. While welfare enrollment dropped, employment gains were temporary and the share of families living in deep poverty increased.
The devil – and expense – is in the details
Most of the reasons that nonworking adults on Medicaid give for not holding jobs should generally exempt them from a work requirement. Were Oklahoma to gain federal permission to institute a work requirement, and were Oklahoma to implement it flawlessly, most individuals who are currently on SoonerCare would remain in the program.
However, implementation would almost certainly hit a few bumps. Building a work requirement into SoonerCare’s enrollment and eligibility verification program is no small task, especially if Oklahoma chose to allow looking for work, continuing education, or volunteering to fulfill the requirement. How could a job search be verified? Would churches and non-profits be required to certify whether a particular individual volunteered with them? What happens if a college transcript can’t be obtained within a particular time period because a student owes fees they can’t afford to pay? Adjusting the SoonerCare enrollment system to handle these new variables would be complicated and expensive. And trying to implement it on the cheap would create serious danger of taking away health care from people who are doing everything they can to be responsible citizens.
What are we trying to accomplish?
As Oklahoma lawmakers consider the lure of a work requirement, it’s important to determine what it is we want to accomplish. Clearly, work requirements won’t result in widespread movement of SoonerCare members into the workforce – after all, most are either children or are already employed. Work requirements won’t help members who aren’t in the workforce already get there, as they face barriers to employment a work requirement won’t address.
However, work requirements will make it more difficult for very low-income parents to access basic health care. They will result in people needlessly losing coverage. They will be expensive for the state to implement and maintain.
Is that what we want?