Up To 183,000 People Could Lose Medicaid Coverage In Michigan

So-called work requirements could make them the latest casualties in the GOP's war on Obamacare.

Between 61,000 and 183,000 low-income residents of Michigan are likely to lose government-provided health insurance next year, thanks to new Medicaid rules the state Republican legislature passed last summer and that the newly elected Democratic governor now wants those lawmakers to amend.

The changes apply to people who got Medicaid because of Michigan’s expansion of the program, in 2014, when the state tapped federal dollars available through the Affordable Care Act and opened enrollment to anybody with income below or just above the poverty line. Under new requirements set to take effect in January 2020, those beneficiaries must demonstrate they are working at least 20 hours a week, trying to find work or unable to work.

Supporters, including GOP leaders in the legislature, say the new requirement and reporting regimen will encourage people to find jobs ― and that, more fundamentally, it’s wrong to demand taxpayers subsidize health care for people who could find employment but don’t.

But most people who got coverage through the Medicaid expansion are either working already or cannot hold jobs, because they are caring for others or have serious conditions of their own, studies have shown repeatedly. And in Arkansas, which imposed work requirements last year, more than 18,000 people lost their coverage for failing to comply.

If local reporting and available data are indicative, people aren’t generally losing coverage because these people actually failed to meet the work requirement or lack qualifying hardships. Instead, they are losing coverage because they had difficulty navigating the complex reporting requirements.

Advocates for the poor worry the same thing will soon happen in Michigan, only on an even larger scale, and that it probably won’t stop there.

Gretchen Whitmer, Michigan's newly elected Democratic governor, is urging the GOP state legislature to roll back Medicaid work requirements slated to take effect next year.
Gretchen Whitmer, Michigan's newly elected Democratic governor, is urging the GOP state legislature to roll back Medicaid work requirements slated to take effect next year.

The federal Medicaid law, which dates back to 1965, requires that states seeking major changes get special permission from the federal government. The Obama administration looked askance at work requirements on the theory that they could harm beneficiaries, which would be a clear violation of the Medicaid statute.

The Trump administration has taken a different attitude, approving seven such applications, including Michigan’s, with another eight now pending.

Seema Verma, chief administrator of Center for Medicare and Medicaid Services, has been a vocal proponent of the work requirements ― arguing last year that they are “not some subversive attempt to just kick people off of Medicaid … their aim is to put beneficiaries in control with the right incentives to live healthier, independent lives.”

But there is scant evidence that work requirements encourage people to find employment. If anything, the evidence suggests the opposite ― that Medicaid coverage makes it easier for people to find and hold on to jobs, most likely because they don’t have to worry about medical problems that would make work difficult.

Of course, it’s not clear how much the Trump administration cares about what happens to the people who lose Medicaid ― or whether it cares at all. Among the first states to get the administration’s go-ahead for work requirements, not a single one of them had created systems for checking whether people losing coverage end up in better jobs or with better health, according to an investigation that the Los Angeles Times published this week.

In fact, it’s hard to look at the requirements and not see them as part of a broader, more general assault on government-financed health insurance ― an assault that is still ongoing, all across the country, even though GOP efforts to repeal “Obamacare” were perhaps the single biggest reason Republicans suffered such a devastating rebuke at the polls in the midterm elections.

Michigan, a state that was pivotal in Trump’s 2016 presidential victory, was actually one of the states where Republicans fared worse. They lost a pair of closely contested congressional races along with the top statewide offices, up to and including governor.

Gretchen Whitmer, the state senator who would eventually win that contest, attacked her GOP opponent for supporting repeal of the Affordable Care Act. She also touted her role in getting the Medicaid expansion through the state legislature.

Seema Verma, who oversees Medicaid for the Trump administration, has urged states to impose work requirements on Medicaid — and approved several applications to do so.
Seema Verma, who oversees Medicaid for the Trump administration, has urged states to impose work requirements on Medicaid — and approved several applications to do so.
The Washington Post via Getty Images

Michigan has been a case study in what the expansion can accomplish. Approximately 680,000 residents now have health insurance through the expansion, and as a result they are more likely to get medical care (like treatment for heart conditions) and less likely to experience financial distress (like running up credit card debts), according to studies by researchers at the University of Michigan.

But Michigan’s legislature, where gerrymandering has given conservative Republicans extra clout, resisted the expansion for years, even though the former two-term governor, Republican Rick Snyder, was in favor.

With Snyder on his way out of office last year, because of term limits, and the GOP’s hold on that position in clear jeopardy, the legislature passed (and Snyder eventually signed) legislation creating the work requirements. That legislation included a “trigger” provision that would have rolled back the expansion altogether if the federal government didn’t give approval, which it did pending confirmation and a few minor modifications from the state.

On Friday, Whitmer provided the Trump administration with that confirmation, setting the stage for the work requirements to start next January. But in the official letter, Whitmer repeated some of the objections she had made as a candidate ― and cited a new analysis, from the national consulting firm Manatt, Phelps and Phillips, projecting that Arkansas-level effects would mean 183,000 people on Medicaid losing their insurance, or more than a quarter of the people who got coverage through the expansion.

“The effect of these coverage losses on individuals’ health and financial security is sobering to contemplate,” Whitmer wrote. “As in Arkansas, Michigan’s new law provides no resources for job training, job search, or job supports. There is no reason to expect better job outcomes.”

It will be up to the state’s Department of Health and Human Services to put in place the new system for beneficiaries to report their work status. But while Michigan already has a well-developed online portal for public benefits, Robert Gordon, the new state secretary of health and human services, said he too worries about a replay of the Arkansas experience ― with people losing coverage even when they are following the rules when it comes to employment.

“Whether or not they make sense in principle, we know what happens with work requirements,” Gordon told HuffPost. “People don’t get information on how to comply, they don’t understand how they are supposed to comply, they try to comply and are not able to, or they comply and government makes a mistake and doesn’t realize it.”

Whitmer campaigned for governor as somebody who could get things done, like “fixing the damn roads,” by citing her history of bipartisan work in the state senate. But GOP lawmakers are already pushing to block or overturn some of her early moves, including a rollback of Snyder-era changes that give business groups more sway over environmental regulations.

“Although the governor says she is committed to partnering with the legislature, she first makes us aware of her intent to water down Michigan’s thoughtful Medicaid work requirements via a press release,” Mike Shirkey, Republican leader in the state Senate, said in a statement.

“I will be an active listener and participant in discussions with my governor, but I wholeheartedly believe the work requirement is necessary for Healthy Michigan to continue to function,” he said.

Republicans believe, rightly or wrongly, that work requirements are popular. Whether they reconsider the Medicaid changes could depend in part on whether they face political pressure ― say, from from advocates for the poor or the health care industry, and the governor as well.

“They’re not listening to national policy experts and research and analysis,” said Gilda Jacobs, president of the Michigan League for Public Policy, a research institute that focuses on poverty-related issues. “But maybe, just maybe, today they’ll listen to the head of our state government and the ultimate advocate for our state residents.”

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