Ohio Debates Work Requirements for Medicaid

Jan 22, 2018

Credit DAN KONIK / STATEHOUSE NEWS BUREAU

Ohio's GOP Legislature passed a budget last year that requires the state to apply for permission to impose work requirements on able-bodied Medicaid recipients. That could mean thousands of Ohioans could lose their health-care coverage.

General disagreement
Generally, conservatives and liberals disagree strongly over work requirements for Medicaid recipients.  From the right is Rea Hederman with the Buckeye Institute, which calls itself a free market think tank.

“Healthy people can work, they can go to job training and this will help them over the lifetime as they acquire valuable skills to make them worth more in the labor market.”

And from the left is Wendy Patton with Policy Matters Ohio, which studies labor and other issues from a progressive perspective.

“Work requirements are redundant and unnecessary because this population is already working.”

A recent report
Patton says the Kaiser Family Foundation shows 60 percent of Medicaid recipients are working, while another 10 percent are looking for work. She says in Ohio that number is closer to 15 percent. 

Of the remaining Medicaid recipients who aren’t working, about a third are disabled, another third are caring for a family member, about 15 percent are in school and 10 percent are retired. So the population that would be affected by work requirements is small.

But Hederman points to one reason why states are going forward with applying for waivers – the Affordable Care Act.

'Healthy people can work, they can go to job training and this will help them over the lifetime as they acquire valuable skills to make them worth more in the labor market.'

Medicaid expansion under the Affordable Care Act meant "now we’re going to make it available to single healthy adults; able-bodied males could now be eligible for the Medicaid program. And that’s a real fundamental shift, taking the program from focusing on needy people to an entitlement where able-bodied people could get it,” Hederman said.

And Hederman says that's a disincentive leading people to drop out of the labor market, which will hurt them over time as skills deteriorate and they earn less money.

Job churn and stringent work requirements

'Offering training that's appropriate and helps people move up, that's all good. Doing it with a big stick that can knock people out of their health coverage is a bad way to go about it.'

But Patton says the problem is the churning low-wage labor market and how it meshes with stringent work requirements.

“Many people get less than 20 hours a week, and schedules are very variable. ... Someone may not make their monthly work requirement just because of a scheduling problem at their workplace and lose their health care as a result. This is another bad outcome,” Patton said.

Too much for Medicaid, too little for healthcare
And there are questions about whether Medicaid recipients who find low-wage jobs would make too much money to qualify for Medicaid – while their jobs would likely not come with health insurance benefits.

But Hederman says requiring work for benefits brings Medicaid in line with other program such as SNAP, or food stamps. And getting a job isn’t the only way to meet those requirements. Recipients can be looking for work, volunteering  or be in school or job training.

But Patton also adds that she’s concerned about a lack of funding for those programs. 

“We’re under-resourced in training right now as it is. Some of the goals that we want to get to – offering training that’s appropriate and help people move up – that’s all good,” Patton said. “Doing it with a big stick that can knock people out of their health coverage is a bad way to go about it.”

Support from the governor
Gov. John Kasich has been a strong supporter of Medicaid expansion. In the budget, majority Republican state lawmakers ordered the state to apply for the work requirements waiver, and also are requiring the Kasich administration to come back to lawmakers to ask for Medicaid expansion funding every six months.

But Budget Director Tim Keen has said he thinks the number of people who will lose coverage because of work requirements won’t be a significantly large number. And Hederman agrees that the point isn’t to save the state money.

“I don’t think that this is a budget cutting exercise, because there are more effective ways to reduce Medicaid than looking at this. This is a matter of aligning incentives.”

So far 10 states have applied for waivers to impose work requirements on Medicaid recipients. Ohio hasn’t applied for the waiver yet.