Document Type

Other

Publication Date

2018

College/Unit

Eberly College of Arts and Sciences

Department/Program/Center

Political Science

Abstract

West Virginia is one of the poorest states in the nation, and West Virginians face some of the highest rates of illness and disability. One of the few bright spots for the health of West Virginians have been government-funded programs like Medicaid and the Children’s Health Insurance Program (CHIP). The Affordable Care Act (ACA), including the expansion of Medicaid under Governor Tomblin in 2014, has brought health coverage and access to care to hundreds of thousands of West Virginians. Today, about a third of West Virginians rely on Medicaid, and the program has become the backbone of the state’s health infrastructure.

Yet various efforts to transform the Medicaid program, including rolling back the expansion under the ACA or transforming the program into a block grant, pose major challenges to beneficiaries and the state. The most recent proposal, the implementation of work requirements for beneficiaries promoted by the Trump Administration, also falls into this category. Based on this analysis, work requirements would pose a significant challenge for beneficiaries, state government, and the broader health care system in West Virginia.

Work requirements have been touted by proponents for a variety of reasons including as encouraging a “culture of work,” prioritizing scarce government resources, providing a way out of poverty for beneficiaries, and undoing the disincentives inherent in public assistance programs. Based on these rationales, work requirements have been implemented in a variety of public assistance programs such as Temporary Assistance for Needy Families (TANF) program, the Supplemental Nutrition Assistance Program (SNAP), and some Section 8 Housing Choice Vouchers or rent subsidies programs. While proponents of work requirements have hailed these developments as vindication, more deliberate analyses raise questions about the overall effects of the reforms. Particularly, assessments of the long-term effects on beneficiaries and their families raise cause for concern.

A number of challenges are inherent to establishing work requirements in the Medicaid program. These challenges make their implementation in an effective, efficient, and equitable manner a dauting task. These include:

  • defining covered populations and exemptions
  • defining work and community engagement
  • developing infrastructure and bureaucratic capacity
  • establishing reporting requirements
  • defining sanctions and loss of coverage
  • developing work supports and work incentives
  • protecting beneficiaries and populations with vulnerabilities
  • addressing cumulative challenges of out-of-pocket costs and health behavior incentives
  • reducing effects on the larger health care system and other support systems
  • accounting for other efforts to curtail public assistance

Not surprisingly, most states seeking work requirements for their Medicaid program have only paid limited attention to these tasks. Great care must be taken by policymakers to avoid unintended consequences and inequities.

Applying other states’ work requirements to the West Virginia context illustrate the potentially wide-reaching consequences for the state. Based on the U.S. Census Bureau’s 2016 American Community Survey (ACS) this analyses finds that a Kentucky-style work requirement, i.e. a work requirement applicable to the entire Medicaid population from ages 19 to 65, with certain exemptions for the disabled, students, caregivers of children or people with disabilities, would affect more than 200,000 West Virginians. Of these, 70,000 would be exempt, 36,000 are working and in compliance with the requirements, 17,000 are working but not in compliance with the requirements, and 78,000 are neither working nor in compliance with the requirements. Based on experience in other public assistance programs and the implementation of work requirements in Arkansas, coverage losses for non-exempt individuals alone could range from 66,000 to 112,000 West Virginians under a Kentucky-style approach. Alternative scenarios developed based on different childcare exemptions and work efforts required estimate coverage losses as high as 144,000 for non-exempt individuals.

A number of barriers would make it particularly challenging for West Virginia’s beneficiaries to comply with work requirements. These includes limited educational attainment, health limitations, and limited access to transportation, phone, and internet. Moreover, most jobs obtainable by beneficiaries generally do not offer health benefits. High level of unemployment, labor surpluses, and high rates of persistent poverty point to the often limited demand for labor across the state. State government would also face significant financial exposure including costly IT upgrades, as well as the need to significantly augmented its administrative capacity to establish and implement the program. Finally, a reduction in the influx of federal Medicaid funding and ensuing coverage losses would pose tremendous challenges for health care providers, particularly those in the state’s most rural areas. Payment reductions would leave a deep mark on the state’s economy.

Taking away medical coverage runs contrary to the goal of alleviating poverty and transitioning Medicaid beneficiaries into stable work environments. An expert consensus has emerged that universally emphasizes the strong positive effects that sustained health coverage has in supporting the work efforts of beneficiaries. Perhaps most concerning, a work requirement may cause significant harm to populations with vulnerabilities, even if they are technically exempted from them.

Several other options exist, however. Strengthening the state insurance market by implementing a state-based individual mandate, establishing a reinsurance program, and restricting short-term, limited duration health plans would reduce premiums and increase coverage, as would an expansion of the Children’s Health Insurance Program and a dedicated outreach and enrollment campaign during open enrollment for the Affordable Care Act’s marketplace. Efforts to create healthier environments and lifestyles including higher tobacco and soda taxes and access to clean air and water are equally crucial, as are efforts to combat the rampant opioid epidemic.

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