Risks of Work Documentation Requirements in Non-Expansion States: What Texas Can Learn from Alabama’s Proposal

/, Health Care, State & Federal Budget/Risks of Work Documentation Requirements in Non-Expansion States: What Texas Can Learn from Alabama’s Proposal

Earlier this year, the Center for Medicaid and Medicare Services (CMS) told states they would support state proposals to change Medicaid rules so that adults would be required to provide documentation that they work a certain number of hours per week. Soon after this was announced, several states submitted such proposals. So far, CMS has approved work documentation requirements in 3 states: Kentucky, Indiana, and Arkansas. All three of these states have at least one thing in common: they’ve expanded Medicaid to adults below or near poverty under the Affordable Care Act. But what if a state that has not expanded Medicaid, like Texas, were to implement these requirements?

In non-expansion states, the only adult populations that could possibly be made subject to work documentation are the small populations of youth below age 26 who aged out of the foster care system and low-income parents, because CMS’ guidance exempts adult Medicaid recipients who are blind, disabled, or over the age of 65 from work documentation requirements. Several non-expansion states have requested permission from CMS to impose work documentation requirements on parents and former foster care youth including Alabama, Mississippi, and Kansas (so far, none of these waivers have been approved).

In response to Alabama’s proposal, the Georgetown University Center for Children and Families has released a report on the potential impact to Alabamians if the state’s proposal were to be approved. This report can be a valuable resource for Texans evaluating the idea of work documentation requirements, because Texas and Alabama have very similar Medicaid populations. Neither state has yet expanded Medicaid under the ACA, and both are tied for the lowest income limit for parents to enroll in Medicaid at 18% of the federal poverty level. This means a single parent with two kids would have to earn less than ~$316 per month to be considered eligible – in other words, working more than 11 hours per week at minimum wage ($7.25/hr) would make the parent ineligible.

According to the report, Alabama’s proposal to require parents to work between 20 and 35 hours per week would have the primary impact of forcing parents to become uninsured. In the first year alone, there is expected to be a 12% reduction in enrollment for parents in Medicaid. The proposal creates a no-win situation: the income cap is so low that if a parent increases their work hours to the required 20 to 35 hours per week, they would actually make too much money to still qualify for Medicaid—but without gaining employer-sponsored health benefits, and likely not earning enough to afford private insurance. If they do not work those hours, they can also have their Medicaid terminated.

Many Alabama parents who are not working are caring for a child or someone with a disability. Again, a parent in that situation may not be able to work the required amount of time, and would lose their Medicaid as a result. When a parent becomes uninsured it’s not just bad for them: it impacts their whole family. Children with uninsured parents are more likely to be uninsured themselves and are less likely to visit a doctor regularly. These families are also at increased risk of medical debt, holding the family back from progress up the economic ladder.

If Texas were to implement a similar requirement on parents and caretakers in Medicaid, we would see strongly similar results: parents taking care of children would lose their health insurance coverage. The no-win outcome from Alabama’s proposal—you will lose your Medicaid whether you work the required hours or don’t—suggests very strongly that Alabama’s waiver is not about helping families acquire more work, but is only aimed at reducing enrollment in Medicaid.

For more read our policy brief on why Medicaid work requirements are bad medicine for Texans.

Melissa joined the Center in 2015 and works remotely from Houston. She focuses on policy and practice related to outreach and enrollment for the Affordable Care Act (ACA) health insurance Marketplace, Medicaid, and the Children's Health Insurance Program (CHIP), including access to coverage for immigrants. Melissa has provided policy analysis, training, and troubleshooting guidance to health care enrollment assisters across Texas. Prior to joining the Center she worked as a Senior Policy Analyst for the Texas Health and Human Services Commission on the team that implemented eligibility changes to the Medicaid and CHIP programs required by the ACA. Melissa earned a Master of Science in Social Work from the University of Texas at Austin and a Bachelor of Science in Sociology from the University of Central Arkansas.

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