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.
Gov. Gretchen Whitmer will soon face one of the most consequential choices of her young administration. At stake are the lives and health of thousands of Michiganders.
The issue is the implementation of the Medicaid work requirement — one of the “parting gifts” that 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% 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 nonelderly 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. These problems will, of course, be exacerbated in our state, with its high car insurance rates and limited access to public transit.
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. And, 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, over 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. They were thrown off of the rolls because they could not navigate the state’s reporting bureaucracy.
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 over 180,000 Michiganders lose their health insurance, they will be condemned to avoidable illnesses, medical complications, and even death. For example, reducing Medicaid expansion to this extent would result in an estimated 165 fewer cancer diagnoses being made — including 145 early-stage cancer diagnoses — annually. And if the more than 180,000 Michiganders who lost their Medicaid did not find other health coverage, roughly 579 additional people would die each year.
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-Senator Whitmer played the key role in rounding up the votes to sign on. She took on powerful voices from her own Democratic Party who wanted to deny Gov. Snyder a legislative win, as well as those in the Republican Party who opposed any Medicaid expansion. 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. Although it is tempting to blame the Arkansas results on a particularly poorly designed website, the evidence suggests that the problems go much deeper — and are, indeed, inherent in requiring poor and disabled people to navigate through a complex bureaucracy while engaging in all of the other tasks necessary to manage their lives.
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 legislation that created the requirement already contains a number of automatic exemptions. The requirement excludes individuals who are under 19 or over 62, for example, as well as those who have already been determined to have complied with — or been exempt from—the work requirements under the Supplemental Nutrition Assistance Program.
But the statute does not limit the automatic exemptions to those that it specifically enumerates. It provides that, when the Michigan Department of Health and Human Services implements the work requirement, the requirement “must include, but is not limited to,” the eligibility standards and exemptions listed in the legislation. And it provides that MDHHS must implement the work requirement “as approved in the waiver” issued by the federal government.
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.
One way to design such an exemption is to exempt Michigan counties who are found to be “distressed” or “at risk” by the Economic Innovation Group’s (EIG) Distressed Counties Index. Based on EIG’s index, which includes measures such as the share of adults not working, the share of people without a high school degree, the poverty rate and more, a quarter of Michigan’s counties fall into these two classifications. These include areas such as Wayne, Genesee, and Saginaw Counties, as well as rural areas throughout both the Lower and Upper Peninsulas. If MDHHS were to administratively exempt individuals in these counties from the work requirement, the high-end estimate is that only about 109,000, instead of 183,000, people would be thrown off the rolls. That would still be a substantial harm, but it would potentially protect over 70,000 people from losing their Medicaid lifeline.
So Gov. Whitmer has a choice. She can implement the work requirement as it is. Or she can add new administrative exemptions allowed by the Medicaid waiver the Trump Administration approved. At stake may be the availability of health insurance for over 70,000 Michiganders.
Adding a new administrative exemption will require leadership. Gov. Whitmer may subject herself to attacks from Republicans in the legislature, and she might find herself in litigation with the Trump Administration. But adding such an exemption has a sound legal and moral basis.
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.