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Last week, a federal judge struck down the Trump administration's approvals for work requirements in Medicaid programs in both Kentucky and Arkansas. In June 2018, after a go-ahead from the administration, Arkansas began requiring Medicaid recipients to document 80 hours of work each month in order to continue receiving assistance. Since then, the damage on the ground in Arkansas is apparent. Over the past several months since implementation, approximately 18,000 Medicaid recipients in the state have lost their coverage.
Though Kentucky had planned to implement its own work requirements beginning in July 2018, the same judge, U.S. District Judge James Boasberg, had ruled against Kentucky's federal approval last June, writing that Health and Human Services Secretary Alex Azar “never adequately considered whether [Kentucky’s program] would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid … render[ing] his determination arbitrary and capricious.” As a result, Kentucky did not move forward with implementing its work requirements and program changes, and instead (with minor tinkering) resubmitted the waiver request to federal officials, who dutifully reapproved it. The state had indicated that approximately 100,000 low-income people would lose their health benefits as a result of their work requirements.
With the new court ruling, Arkansas's program has been struck down—and Kentucky's has been lambasted once again. (However, Asa Hutchinson, Arkansas's Republican governor, claims his state's program is merely on pause while the state scrambles to appeal the decision.)
For those who have been subject to the work requirement in Arkansas, the ruling “eliminates the stress of not knowing day to day whether you're going to have insurance next week or next month,” says Kevin De Liban, an attorney with Arkansas Legal Aid, which brought the lawsuit along with the National Health Law Program and the Southern Poverty Law Center against the administration on behalf of their clients. “People can now rest for the first time in a year [and] know that they're going to be able to have health insurance.”
Beyond the stress of not knowing whether one can pay for a doctor's visit, there's the stress that is also a feature of the low-wage labor market where people who are subject to Medicaid work requirements typically work. In many media depictions of work requirements, it is rarely mentioned that most low-income people who receive these benefits are already working, and generally in jobs that are difficult, exhausting, and unstable. Recent studies have shown that when people who receive Medicaid are not working, it’s often because they are between jobs, sick, or taking care of a family member.
Even though the court has compelled Arkansas to abandon its work requirements, there are still thousands of state residents who lost their coverage and must reapply to get their coverage back. “People from the outside don't always understand how difficult it can be … how much time you have to spend on the phone with DHS or how much help you need from a lawyer” just to manage Medicaid, says De Liban.
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De Liban also told the Prospect that Arkansas’s termination numbers would have been much higher if the state had not chosen to automatically exempt some Medicaid recipients from the work requirement. Approximately 80 percent of those subject to the work requirement were instead automatically exempted. But auto-exemptions are by no means a requirement in every state—Kentucky, for example, would not automatically exempt people subject to the work requirement, leaving 100,000 people without benefits, as the state itself reported.
The Trump administration signaled to states in late 2017 that it would begin allowing work requirements, and approved Kentucky’s waiver request in January 2018. Since, eight other states (Arizona, Indiana, Arkansas, Michigan, New Hampshire, Ohio, Utah, and Wisconsin) have had programs approved, while six others (Alabama, Mississippi, Oklahoma, South Dakota, Tennessee, and Virginia) have pending requests. In Michigan and Wisconsin, new progressive governors have suggested that they’re not fully on board with going forward with Medicaid work requirements. And some progressive lawmakers in New Hampshire have introduced a bill to make changes to the state’s work requirement—and in a preview of another legal battle to come, Medicaid recipients in New Hampshire have also sued the Trump administration.
These requests come under Section 1115 waiver authority, which under the Social Security Act, allows states to run “demonstration projects” to identify promising new ways to deliver benefits. According to De Liban, the Trump administration is distorting the intention of this authority to allow requirements that Arkansas Legal Aid—and a host of other advocates, organizations, and at least one federal judge—say are illegal. If Medicaid work requirements slash thousands of people from the rolls, how can they possibly fit the intention of Medicaid to provide health insurance to low-income people?
The Trump administration's answer has been to claim that such requirements will actually improve health outcomes. To back up this claim, they have redefined Medicaid's objectives.
Though providing low-income people with health insurance is a central objective of Medicaid, the administration argued in its approval of Kentucky’s work requirements that, “[T]here is little intrinsic value in paying for services if those services are not advancing the health and wellness of the individual receiving them, or otherwise helping the individual attain independence. Therefore, we believe an objective of the Medicaid program, in addition to furnishing services, is to advance the health and wellness needs of its beneficiaries, and that it is appropriate for the state to structure its demonstration project in a manner that prioritizes meeting those needs.”
The sleight-of-hand here is to have conflated some strange definition of “independence”—in this case, working in paid employment for a specified number of hours—with health and wellness.
Court ruling or no, the administration is sticking to this interpretation. After last week's decision, Centers for Medicare and Medicaid Services Administrator Seema Verma said in a statement, “We will continue to defend our efforts to give states greater flexibility to help low income Americans rise out of poverty … and test reforms that will advance the objectives of the Medicaid program.”
The argument that work requirements will actually improve the health of poor people is the chosen justification for states, too. In its waiver request, Kentucky argued that people who work tend to be healthier than people who don’t by citing a study that suggests that unemployment is linked with poor health. Correlation, of course, does not prove causation; there is no evidence whatsoever that work requirements will improve people’s health. But Section 1115 waivers for demonstration projects depend on evidence. States are required to collect data from their projects, and have a clear plan for evaluation, so that the federal agency can determine whether the project is effective. That’s the very point of a demonstration.
Of course, it seems more likely that work requirements will harm the health of low-income people, as the 18,000 people in Arkansas who lost their health insurance due to work requirements would likely attest.
Not surprisingly, Arkansas has not collected much data at all on the effects of its work requirements. De Liban says that it's impossible to know if those who have been terminated from Medicaid live in areas where low-wage unemployment is high, because the state is not providing any of that data. Given the absence of data, it's not hard to see the real point of these work requirement: boosting a “self-sufficiency” narrative though it does not comport with reality.
Responding to the court's ruling, Republican lawmakers in Kentucky and Arkansas have threatened to strike down Medicaid expansion if they can't infuse it with their ideology. In Kentucky, Governor Matt Bevin has presented a false choice between safeguarding Medicaid expansion and allowing work requirements to take hold; he issued an executive order last year directing his administration to cancel Medicaid expansion if a court struck down the work requirement plan. Similarly, the Arkansas legislature voted against a plan to provide appropriations to the Medicaid expansion last week, though it did pass a bill on Tuesday that would keep Medicaid expansion intact for at least one year.
What the data do show is that Medicaid expansion has been extremely successful for those low-income people that have been able to acquire health insurance. In Kentucky (where Medicaid was expanded under Governor Steve Beshear, Bevin's Democratic predecessor), more people have been able to access preventative treatment for diabetes, hypertension, and asthma—diseases that plague poor communities—and they also reported generally better health. The uninsured rate in that state fell from 40 percent in 2013 to just 7 percent by 2016.
There is a moral argument for ensuring that all people have health care, but there is also even an argument for those who want to encourage work—and that is that chronic diseases like diabetes, hypertension, and asthma inhibit a person's ability to live well and work.
Meanwhile, despite last week's court decision, the Trump administration appears undaunted: federal officials approved a Medicaid work requirement plan for Utah just days after the Kentucky and Arkansas ruling.
Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives' age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren't made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.
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