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Research & Commentary: Wisconsin Should Retain New Medicaid Work Requirements

November 30, 2018

In this Research & Commentary, Matthew Glans discusses Wisconsin's welfare reform efforts and why the legislature should consider legislation preserving the reforms and writing them into law.

In October, Wisconsin became the most recent state to incorporate work requirements into its Medicaid program, known as BadgerCare. The mandate requires childless adults under age 50 with incomes below the federal poverty level to meet a work requirement to retain their benefits. The rules require recipients to spend at least 20 hours a week working, receiving job training, volunteering, or participating in other qualifying activities.

The requirements, which apply to approximately BadgerCare 178,000 recipients, include exemptions for the disabled, medically frail, and primary care givers. The rules also include a small premium payment: childless adults with an income between 50 percent and 100 percent of the federal poverty level must pay an $8-per-month premium and a co-payment for some emergency room visits. Before being implemented the new rules required a federal waiver, which was approved by the Department of Health and Human Services (HHS) in October.

Democratic Governor-elect Tony Evers has voiced his opposition to the new rules and says he is considering eliminating the work requirement. According to Robin Rudowitz, a Medicaid expert at the Kaiser Family Foundation, Evers is not bound by the Medicaid changes approved in October and could end the work requirements by executive order.

To preserve the work requirements, Wisconsin lawmakers must act quickly. The legislature could incorporate BadgerCare work requirements into state law during a special session, thus making them permanent before Evers takes office early next year.

Work requirements for able-bodied adults without dependents (ABAWDs) are vital for states looking to ensure the long-term viability of their Medicaid programs. Moreover, these rules help transition people from government dependence to self-sufficiency. A well-paying job is a far better way for people to live happy, healthy, and productive lives as opposed to making them comfortable in their unemployment. According to the Robert Wood Johnson Foundation, a good-paying job often provides solid health benefits and makes it easier for workers to “live in healthier neighborhoods, provide quality education for their children, secure child care services, and buy more nutritious food—all of which affect health.”

Opponents of work requirements claim they force people off Medicaid without reliable access to health care, but the majority of individuals leaving Medicaid subsequently enroll in a private, employer-sponsored insurance plan, which offers much better benefits and health outcomes than Medicaid. According to the U.S. Bureau of Labor Statistics, health care benefits were available to “69 percent of private industry workers and 89 percent of state and local government workers in March 2018.”

Incorporating work requirements into Medicaid is essential because Medicaid rolls are expanding faster than the program can handle. The number of able-bodied adults enrolled in Medicaid rose rapidly from 2013 to 2015, from fewer than 133,000 to more than 633,000. Furthermore, government spending for this population rose by almost 500 percent from $667 million in 2013 to $4 billion in 2015.

The challenge of welfare reform is creating a true safety net that effectively lifts people out of poverty without creating incentives for dependency. The real focus of welfare programs must be to provide temporary or supplemental assistance while encouraging work and independence. Wisconsin’s welfare reforms are an example for all states, the legislature should move to preserve these improvements.

The following documents examine Medicaid reform and work requirements in greater detail.
 

Research & Commentary: States Pursue Work Requirements for Medicaid
https://www.heartland.org/publications-resources/publications/research--commentary-states-pursue-work-requirements-for-medicaid?source=policybot
Senior Policy Analyst Matthew Glans examines efforts by several states to add work requirements to their Medicaid programs. “Implementing Medicaid work requirements would be a good first step for Medicaid-expansion and non-expansion states toward helping to limit the rising costs of Medicaid,” Glans wrote.

The Oregon Experiment—Effects of Medicaid on Clinical Outcomes
https://www.heartland.org/publications-resources/publications/the-oregon-experiment--effects-of-medicaid-on-clinical-outcomes?source=policybot
This article from The New England Journal of Medicine examines Medicaid outcomes in Oregon. Oregon gave researchers the opportunity to study the effects of being enrolled in Medicaid (compared to being uninsured) based on data from a randomized controlled trial, the “gold standard” of scientific research. The results showed no improvement in health for enrollees, but it did reveal better financial protections for patients and increased medical spending.

The Value of Introducing Work Requirements to Medicaid
https://www.americanactionforum.org/research/value-introducing-work-requirements-medicaid/
Ben Gitis and Tara O’Neill Hayes of the American Action Forum examine the value of work requirements and argue more work requirements are needed in other safety-net programs, including in Medicaid.

Don’t Wait for Congress to Fix Health Care
https://www.heartland.org/publications-resources/publications/dont-wait-for-congress-to-fix-health-care
Heartland Senior Policy Analyst Matthew Glans documents the failure of Medicaid to deliver quality care to the nation’s poor and disabled even as it drives health care spending to unsustainable heights. Glans argues states can follow the successful examples of Florida and Rhode Island to reform their Medicaid programs or submit even more ambitious requests for waivers to the Department of Health and Human Services, an option the Trump administration has encouraged.

Maine Food Stamp Work Requirement Cuts Non-Parent Caseload by 80 Percent
http://www.heritage.org/welfare/report/maine-food-stamp-work-requirement-cuts-non-parent-caseload-80-percent#_ftnref36
Robert Rector, Rachel Sheffield, and Kevin Dayaratna of The Heritage Foundation examine Maine’s food stamp reforms and discuss how they could act as a model for other states. “The Maine food stamp work requirement is sound public policy. Government should aid those in need, but welfare should not be a one-way handout. Able-bodied, nonelderly adults who receive cash, food, or housing assistance from the government should be required to work or prepare for work as a condition of receiving aid. Giving welfare to those who refuse to take steps to help themselves is unfair to taxpayers and fosters a harmful dependence among beneficiaries,” the authors wrote.

Welfare Reform Report Card: A State-by-State Analysis of Anti-Poverty Performance and Welfare Reform Policies
https://www.heartland.org/publications-resources/publications/2015-welfare-reform-report-card?source=policybot
In 2015, The Heartland Institute published an updated version of its Welfare Reform Report Card. This report card compiles extensive data on five “inputs” and five “outputs” of state welfare and anti-poverty programs and assigns a final grade to each state for its welfare policies.

The Work Versus Welfare Tradeoff: 2013
https://www.heartland.org/publications-resources/publications/the-work-versus-welfare-trade-off-2013-1?source=policybot
The Cato Institute estimates the value of the full package of welfare benefits available to a typical recipient in each of the 50 states and the District of Columbia. The study found welfare benefits outpace the income most recipients can expect to earn from an entry-level job, and the income gap between welfare and work may actually have grown worse in recent years.


Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database.

The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state, or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact Lindsey Stroud, a state government relations manager at The Heartland Institute, at lstroud@heartland.org or 757/354-8170.

Author
Matthew Glans joined the staff of The Heartland Institute in November 2007 as legislative specialist for insurance and finance. In 2012, Glans was named senior policy analyst.
mglans@heartland.org @HeartlandGR

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