Medicaid Work Requirements Raise Discrimination Concerns

Medicaid Work Requirements Raise Discrimination Concerns

By Misty Williams, CQ

Health policy experts and advocates say the way some states are proposing to implement Medicaid work requirements may run afoul of civil rights laws, spurring potential legal challenges.

Several states are considering adding requirements that people who receive Medicaid work or participate in other activities, usually for at least 20 hours per week. Both Michigan and Ohio want to exempt from work mandates residents of counties with high unemployment rates — which also happen to be mostly rural and overwhelmingly white. Meanwhile, predominantly black cities, such as Flint, Mich., and Cleveland wouldn’t get the same break despite having equally high or, in some cases, higher jobless rates.

Consumer advocates say the bubbling controversy raises broader concerns about whether Medicaid work requirement proposals disproportionately impact minorities and America’s poorest citizens, black and white alike.

“If it’s a good policy, why do these folks need to be exempted?” said Joan Alker, executive director of Georgetown University’s Center for Children and Families. “Why do certain people get privileged over others? It certainly raises many, many questions.”

The Trump administration and fellow Republicans tout work requirements as a way to help improve people’s health, lift them out of poverty and reduce their dependence on government assistance. The idea is part of a larger push by conservatives to treat Medicaid more like a welfare program, instead of a health insurance system.

States hope to give people more than just an insurance card, Centers for Medicare and Medicaid Services head Seema Verma said during a talk earlier this week. It’s about a “pathway out of poverty, a bridge to independence.”

Verma noted that the administration recognizes not everyone should be required to work and that it provided guidance to states about what types of individuals should be exempt. CMS also told states to consider developing plans to address people who live in regions with limited employment opportunities, according to a Jan. 11 letter to state Medicaid directors.  

CMS has so far approved work mandates in four states – Kentucky, Indiana, Arkansas and, most recently, New Hampshire. Roughly a dozen others either submitted formal requests to CMS or are considering the idea.

The plans focus on non-disabled, working-age adults who would work 20 or more hours a week or participate in other activities, such as volunteering, job searching or schooling.

Most would exempt people with disabilities, pregnant women and those in substance abuse treatment or who are medically frail. But who would be exempt from work requirements can also vary widely by state, experts say.

Waivers for Counties But Not Cities

In Michigan, a bill winding its way through the state legislature would exempt residents in certain counties – those with unemployment rates of 8.5 percent or higher – from having to meet work requirements to receive health coverage under Medicaid.

Critics argue the only counties that would meet such a benchmark are rural and predominantly white. Meanwhile, cities such as Flint and Detroit that have high unemployment rates – and largely black populations – but are within counties with overall lower rates would not receive a pass.

For instance, more than half of Flint residents are black and the city’s unemployment rate in March stood at 10.4 percent, according to the U.S. Census Bureau and state data. Yet the economically-depressed city would not qualify for an exemption because the overall unemployment rate in Genesee County where Flint is located – with a population that’s three-fourths white – is less than 6 percent.

The legislation's authors may not have intended to discriminate by race, but it’s problematic nonetheless, said Ben Sommers, a Harvard University associate professor of health policy and economics.

“The consequences of carving out high unemployment counties but not cities  . . .  that is really hard to justify on policy terms,” Sommers told CQ.

Whether the discrimination is intentional makes no difference from the perspective of civil rights law, two University of Michigan law experts wrote in a recent New York Times op-ed.

The law bars recipients of federal funds, including state Medicaid programs, from employing “methods of administration that appear neutral but have a discriminatory effect on individuals because of their race,” according to professors Nicholas Bagley and Eli Savit.

“There’s a deeper lesson here,” the men wrote. “If work requirements were a good idea, conservative Michigan legislators wouldn’t need to exempt their rural constituents.”

Both say if Michigan’s lawmakers approve such a plan, it ultimately could be challenged in court.

Ohio's Proposal

Experts say a similar Medicaid work requirement proposal in Ohio could also lead to civil rights and racial bias complaints, as well as litigation.

The plan targets an estimated 36,000 adults who gained health coverage when the state expanded Medicaid under the 2010 health care law (PL 111-148, PL 111-152). Thirty-two states and the District of Columbia expanded the government insurance program for low-income Americans; 18 have not.

The Ohio proposal would waive work requirements in 26 overwhelmingly white counties because of high unemployment. But largely black communities in cities such as Cleveland and other urban areas would get no exemption.

On average, the populations in the exempted counties are 95 percent white; meanwhile, many other communities have unemployment rates equal to that or higher, according to former Ohio Medicaid director John Corlett, now the executive director of The Center for Community Solutions, a nonprofit advocacy group.

“If an area has high unemployment, it should be treated the same,” Corlett said. “By not looking at smaller geographic areas, or smaller units of government, it really leaves some people at a disadvantage.”

Corlett said he believes the issue could lead to legal challenges if federal officials approve the state’s plan.

Ohio formally submitted its Medicaid work requirements proposal to CMS on April 30. Michigan’s plan passed the state Senate and is now under consideration in the House.

CMS, which has to approve states' plans before they can be implemented, did not respond to questions from CQ regarding the concerns about racial discrimination.

Challenges for Vulnerable Groups

Even if states don't specifically exempt areas with high unemployment, Medicaid work requirements will still disproportionately impact marginalized groups, advocates say.

Recent studies of work requirement proposals in Mississippi and Alabama found that African-American mothers and families living in small towns and rural areas would be hardest hit by such mandates, according to researchers at Georgetown.

Both states did not expand Medicaid and have some of the strictest income eligibility levels in the nation. Work mandates are a losing proposition for parents in those states, the university’s researchers concluded. If parents don’t get a job, they would lose their health coverage. But if they do work 20 hours a week, they would make too much money to qualify for Medicaid.

“We’re talking about the poorest, most vulnerable families in these states, and African-Americans are disproportionately represented in this population,” Alker said. “They’re already disadvantaged economically speaking and this is going to make it worse.”

In Kentucky, where the state is set to begin rolling out new work rules this summer, black residents generally have higher unemployment rates and many face barriers to work, such as a lack of transportation and few job options, said Dustin Pugel, a policy analyst at the Kentucky Center for Economic Policy.

At the same time, rural Kentucky communities that are largely white but economically-depressed, such as the eastern part of the state where the coal industry has been decimated, will be hurt, too, Pugel said.

The controversies around work requirements in Ohio, Michigan and other states highlight the complexities of policies that may be politically appealing but problematic when it comes to actually instituting them, said Sommers with Harvard.

“The policy lends itself to an appealing soundbite,” he said. “But the devil’s in the details.”