To Save Medicaid, Put People to Work

President Trump has a message for millions of able-bodied Medicaid recipients: Get a job.

Since January, the administration has allowed states to require Medicaid beneficiaries who are not disabled to engage in 80 hours per month of work, volunteering, job training, or school in return for taxpayer-funded health coverage. The purpose of this reform is twofold — to conserve taxpayer dollars, and to break the culture of dependency that saps our communities of dynamism and prosperity.

Critics say the work requirements are a heartless attempt to deny health care to Americans incapable of supporting themselves. A new study by the White House Council of Economic Advisors should put such assertions to rest. According to that report, over 60 percent of Medicaid beneficiaries are able-bodied, working-age adults. Of that group, half don’t work.

Medicaid was intended as a safety net for truly vulnerable Americans — not a giveaway to healthy adults who don’t feel like getting a job. Requiring able-bodied citizens to work in return for health benefits, especially those paid for by their fellow citizens, is just common sense.

The report from the Council of Economic Advisors shows just how widespread the epidemic of dependency has become. Just look at the most widely-used federal welfare programs — Medicaid, the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and housing assistance.

In 1979, one in ten able-bodied, working-age Americans used one or more of these programs. By 2016, roughly one in five were receiving government aid. Medicaid accounted for a disproportionate share of that increase.

As of June 2018, nearly 67 million people were enrolled in Medicaid. That’s nearly 28 percent more than in 2013, before Obamacare’s expansion of Medicaid to adults making less than 138 percent of the poverty level took effect.

This spike in welfare dependence has coincided with a considerable drop in labor force participation. As recently as 2000, 77.6 percent of able-bodied, working-age Americans had a job. By 2017, that number had declined to 74.2 percent.

In other words, more than one-quarter of American adults who are capable of working don’t. Welfare programs like Medicaid make it easier for these citizens — especially those who live in the District of Columbia and the 33 states that expanded Medicaid under Obamacare — to remain idle.

This is an appalling misuse of taxpayer money. Medicaid is already a fiscal nightmare. On average, Medicaid spending surged 5.2 percent each year from 2010 to 2014. Currently, nearly one in ten federal dollars goes to the program.

And costs are only expected to increase. So Medicaid will crowd out other important government priorities, from infrastructure to education.

Work requirements aren’t just a prudent way to control costs — they are also a useful tool for driving more Americans back into the workforce. Consider the 1996 welfare reforms, which required low-income Americans to work in exchange for cash payments.

Between 1996 and 2000, single mothers who had previously received cash benefits with few strings attached suddenly were forced to get jobs. The group’s employment rate increased 10 percent; their poverty rate dropped 20 percent.

We should applaud any government policy that drives double-digit improvements in employment — and even greater declines in poverty. Yet activists on the left are doing everything they can to stop

states from replicating the welfare reform successes of the 1990s with Medicaid today.

In January 2018, the Department of Health and Human Services granted Kentucky a waiver allowing the state to impose work requirements. But the National Health Law Program, the Southern Poverty Law Center, and the Kentucky Equal Justice Center sued to stop the reform.

Earlier this summer, in June, the U.S. District Court for the District of Columbia sided with the plaintiffs. Judge James Boasberg concluded that the Trump administration didn’t adequately study whether work requirements would “help the state furnish medical assistance to its citizens.”

The Trump administration is currently working with Kentucky to find a legally airtight way to implement the requirements. But that may not end up being necessary, if Kentucky rolls back its expansion of Medicaid to able-bodied adults altogether. Gov. Matt Bevin’s administration floated doing so last week, as a means of closing a $300 million shortfall in the state’s Medicaid budget.

The National Health Law Program, the Southern Poverty Law Center, and Legal Aid of Arkansas have filed a similar lawsuit to thwart a work requirement proposal in Arkansas. The groups claim work requirements would do “irreparable harm to the health and welfare of the poorest and most vulnerable in our country.”

Such breathless pleas assume that Medicaid only aids Americans who can’t support themselves. In reality, the program rewards millions of healthy adults for choosing not to work — at enormous cost to taxpayers. Asking these Americans to contribute to the economy in return for government largesse is perfectly reasonable.

Read more . . .

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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