If you don’t think about it too hard, it may make sense: Require able-bodied Medicaid recipients to work. So the Trump Administration policy that allows states to revoke Medicaid coverage from certain adult Medicaid enrollees who don’t meet employment requirements may seem sound.
It’s not. You don’t have to dig too deeply to see the damage it will do to the poorest and sickest among us andthe problems it will create for the healthcare providers who serve this population.
Most people on Medicaid already work--or go to school, have a disability or care for a child or an elderly relative, exempting them from the requirement. In fact, a Kaiser Family Foundation study released in June concluded only 6 percent of non-exempt, able-bodied adults on Medicaid are not working.
The KFF study also found that 60 percent of able-bodied adults on Medicaid work at least part time. However, they either are not offered health coverage or can’t afford it.
As goes Kentucky….
Right now, all eyes are on Kentucky. Under a 1115 waiver, it’s Medicaid program requires that, starting in July, non-disabled beneficiaries must complete 80 hours per month of employment or other community engagement activities to maintain eligibility.
Whether this will actually go into effect depends on the outcome of a lawsuit filed on behalf of 16 beneficiaries by the National Health Law Program, the Kentucky Equal Justice Center and the Southern Poverty Law Center.
In an amicus brief supporting the lawsuit, 40 health policy scholars concluded that the waiver would result in “bad outcomes for families across Kentucky for an unreasonably long time…[and] unduly strain safety-net medical providers and the entire Commonwealth health care system.”
Despite this, some states are champing at the bit to follow Kentucky’s lead. CMS has approved Medicaid work requirements in Arkansas, Indiana and New Hampshire; Arizona, Maine, Mississippi, Michigan, Utah and Wisconsin have waiver requests pending.
Millions could lose coverage
According to Kentucky’s own projections, 95,000 Medicaid enrollees would lose coverage within five years under the plan. Other estimates, including those from the Milken Institute at George Washington University, suggest 175,000 to 300,000 Kentucky Medicaid recipients would likely lose coverage in the first year.
As other states follow suit, millions of working people could lose coverage or face interruptions due to unstable employment, irregular hours or even confusion over the required paperwork, warns the Center on Budget and Policy Priorities(CBPP). Based on previous experience with eligibility restrictions in Medicaid and work requirements in other federal programs, it’s clear that many eligible people will lose coverage.
The paperwork hurdle
The perils of paperwork cannot be underestimated. Failure to prove employment could lead to loss of coverage for a month. But Kentucky’s plan would also lock out Medicaid enrollees from coverage for up to six months for failure to timely renew their coverage or failure to alert the state if their financial or family circumstances change, Kaiser Health News reports.
The New York Timesframes it rather starkly: “The Kentucky program won’t just create a work requirement for some beneficiaries; it will set up a broader obstacle course of administrative rules. Many beneficiaries will be asked to pay monthly premiums to the state to retain their coverage, as little as $1 a month for some very poor families, who are unlikely to have bank accounts.”
Actually, working may not be enough
The work requirement policies assume those who want to work can find steady employment at regular hours; this ignores the volatility of the low-wage labor market, according to the CBPP. It points out that the sectors that hire the most Medicaid recipients are food service, retail and construction, all notoriously unstable. Mostworkers in these industries report their hours vary significantly from week to week. Making matters worse, many are expected to be on call, making it difficult to pick up additional work elsewhere.
In fact, 25 percent of those working would be at risk of losing coverage for a month or more because they wouldn’t meet the 80-hour requirement in each month, according to research from the Commonwealth Fund.
Moreover, the federal policy requires states to exempt those who are “medically frail” but not those with an acute medical condition. The CBPP points out that many people with a mental illness that keeps them from working regularly would be at risk of losing coverage.
Impact on health and health care
Ironically, one of the arguments in favor of the work requirement is that working or other community engagement improves health. And yes, there is indeed a correlation between good health and regular employment. But it’s a bit of a leap to assume working improves health.
“We believe taking away access to coverage, especially for people with chronic conditions, will set patients back and they'll get sicker,” Jen Johns, director of government relations for the Cleveland Clinic, told Modern Healthcare. “We want people to be productive members of society, but they have to be healthy to do that.”
And all of this will put a strain on an already overburdened system. A 2018 report by PwC finds that work requirements could dramatically increase churning people in and out of Medicaid programs, and cause disruption for providers and patients as people lose coverage and face interruptions in care.
“Interrupted treatment due to beneficiaries losing coverage, legitimately or erroneously, can affect consumers’ ability to seek care, raising the risk to providers that uncompensated care costs will increase,” the authors conclude.
Similarly, CBPP analysis finds because eligibility restrictions will reverse many of the coverage gains made under the Medicaid expansion, “they will likely reverse a significant share of uncompensated care savings as well.”
Millions could be dropped from Medicaid, placing a tremendous burden on providers who care for poor. Care reimbursed by Medicaid may become uncompensated care. Providers need to prepare. Even if Kentucky loses this particular case, we expect to see some version of work requirements gain traction around the country.
A partial solution--for now
So what are providers to do?
One way to capture at least some money is through retroactive Medicaid.
Many self-pay and uncompensated patients obtain Medicaid long after their initial visit. Once these patients are successfully enrolled, their Medicaid retroactive coverage can be applied to cover previously provided care. This turns potential write-offs into meaningful revenue.
Partnering with a vendor--such as Altruis-- that provides a retroactive Medicaid solution creates new revenue streams by automating the process that identifies coverage, bills payors and reduces the stress of payment on the individuals that need relief from that stress the most.
But that solution may disappear in some states in coming months. Kentucky’s plan eliminates retroactive Medicaid, and many other states seeking the 1115 waiver are doing the same, according to analysis from the Commonwealth Fund. Retroactive Medicaid has become a popular target under the guise of saving money.
If you want to collect for previously uncompensated care, you need to act now. Contact us today to find out about our RetroPay services.