Trump’s Medicaid rules work just fine for bosses

February 7, 2018

The White House reached another low with its plan to require Medicaid recipients to work--but as Christopher Baum explains, the rules have advantages for employers.

WITH CHARACTERISTIC cynicism and cruelty, the Trump administration has announced that it will allow states to impose work requirements on Medicaid recipients, threatening grave consequences for those who rely on government aid to meet their own and their families' health care needs.

Under new guidelines issued on January 11 by the Centers for Medicare and Medicaid Services (CMS), states will now be permitted to make "participation in work or other community engagement" a pre-requisite for continuing to receive Medicaid benefits. As examples of "community engagement," the guidance lists "skills training, education, job search, caregiving, [and] volunteer service."

The CMS guidelines exclude elderly, pregnant, legally disabled and "medically frail" beneficiaries from such requirements, and call on states to make "reasonable adjustments" for those receiving treatment for opioid addiction.

Essentially, though, if the state decides you're fit, it can require you to work in order to continue receiving Medicaid.

Protesters stand up against cuts in the Medicaid health program
Protesters stand up against cuts in the Medicaid health program

Conservatives have been clamoring for Medicaid work requirements for years, so it is little wonder that, having announced what the CMS themselves acknowledge is "a shift from prior policy," the agency immediately set to work rubber-stamping the first round of state government proposals.

The first to be approved--within 24 hours of CMS's announcement--came from Kentucky, a scheme originally submitted in 2016, but that was essentially dead in the water until the new policy was announced.

Under Kentucky's plan, according to Reuters, able-bodied adults between the ages of 19 and 64 will be required to participate in 80 hours of work or "community engagement" per month. "The Kentucky program," Reuters continues, "also imposes a premium on most Medicaid recipients based on income. Some who miss a payment or fail to re-enroll will be locked out for six months."

So not only will Kentucky impose work requirements on many Medicaid recipients, it will begin charging them to have coverage at all.

At least nine other states have submitted similar proposals, including Arkansas, Arizona, Indiana, Kansas, Maine, Mississippi, New Hampshire, Utah and Wisconsin.

THIS IS a line that hasn't been crossed before.

Section 1115 of the Social Security Act has long permitted states to develop programs that deviate from Medicaid's normal rules--as long as, in the judgment of the Secretary of Health and Human Services, the programs in question are "likely to assist in promoting the objectives" of Medicaid.

But because getting people into jobs is not an explicit objective of Medicaid, proposals that have incorporated any sort of work requirement for Medicaid eligibility have, until now, failed to pass this test.

But the Trump administration found a way around this obstacle--by declaring that work requirements are consistent with promoting the objectives of Medicaid, since, according to the CMC guidelines, the mere fact of having a job supposedly leads to better health:

While high-quality health care is important for an individual's health and well-being, there are many other determinants of health...For example, higher earnings are positively correlated with longer lifespan. One comprehensive review of existing studies found strong evidence that unemployment is generally harmful to health, including higher mortality; poorer general health; poorer mental health; and higher medical consultation and hospital admission rates.

It's a stunning passage, to be sure.

Few would dispute that people with more money can generally expect to live longer and healthier lives--nor that the unemployed tend to suffer disproportionately from physical and mental health issues.

But to say that having a job makes the difference--as opposed to, say, having reliable access to "high-quality health care" because of greater financial resources--is absurd even by the debased standards of the Trump administration.

All else being equal, who would you expect to be in better health: a trust-fund millionaire who never worked a day in their life, or a person working two minimum-wage jobs and struggling to feed their family and pay the bills each month? In that case, not having a job is a likely indicator of better health.

As the Kaiser Family Foundation notes in a recent report:

While there is some research showing that increased income or employment is associated with improved health outcomes and mortality, it is difficult to determine the direction of causation--whether income and work lead to better health, or whether better health facilitates income and work.

In addition, research has found some deleterious health effects of work, particularly for people in shift-work positions or those with high job insecurity, and evaluations of existing work requirements in other programs find weak evidence for an effect on health and well-being.

LET'S DISPENSE, then, with the pretense that the Trump administration's policy has anything to do with concern for the well-being of Medicaid recipients. The more pertinent question is what it does for the ruling class.

Big capital tends to benefit from this type of "reform" in two primary ways.

The first is the upward redistribution of wealth. The principle is simple: reduce government expenditures, and the government will need less tax revenue. This allows for reduced taxes--with the most generous tax breaks, of course, invariably going to the very wealthy.

In this way, billions of dollars that would otherwise have gone toward supplying the essential needs of the poorest and most vulnerable segments of society are instead directed right back into the pockets of the richest people on the planet.

This was the thinking behind every one of the Congressional Republicans' failed attempts to "repeal and replace" Obamacare in 2017. They proposed enormous, catastrophic cuts to Medicaid funding, with the resulting "savings" routed directly into tax cuts for the wealthiest Americans.

Having failed to achieve this objective through legislative means, the Trump administration is now trying to achieve something of the same effect through the new CMS policy.

Work requirements can potentially help in kicking recipients out of the system--both those who don't keep up with the work standards, and others who even though they do satisfy all the requirements, are nonetheless "shaken loose" by administrative means, such as complex and burdensome paperwork demands.

On top of outright reductions from the Medicaid rolls, states may hope to slash expenditures on benefits further--if, for instance, they follow Kentucky's lead in forcing recipients who have jobs to pay premiums for their coverage. Every dollar paid by the patient, of course, is one the state doesn't have to pay.

But the perks for capitalists don't stop there. In addition to all the handouts they can look forward to, the bosses also get a more exploitable workforce.

According to the Kaiser Family Foundation report on Medicaid work requirements, roughly 60 percent of non-elderly Medicaid enrollees already have jobs today. Consider how their situation may be about to change.

Under current law, if they lose their jobs or give them up, their medical coverage will continue without any changes. For people living at or below the poverty line, this is a crucial safety net--literally a matter of life and death for some.

With a work requirement scheme, however, enrollees have no such safety net. If they lose their job, they stand to lose their health care coverage as well, with potentially catastrophic consequences.

This gives the employer a powerful hold over them. The potential for abuse of vulnerable workers themselves is obvious: lower wages, longer hours, hostile and/or unsafe workplace conditions, sexual harassment--anything that employees might feel compelled to put up with, so as not to lose their jobs and therefore their health care.

Plus, having achieved this level of exploitation and control over one population of workers, employers can pit those employees against others to weaken and worsen the position of the rest of their workers--for instance, by lowering wages across the board and responding to any protest with the threat of replacing discontented workers with Medicaid enrollees who will be paid even less.

IN 1996, to make good on his campaign promise to "end welfare as we know it," President Bill Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA).

At the time of the act's passage, the welfare system that had been in place since the New Deal was theoretically open-ended--as long as you were eligible for aid, you were supposed to receive it. The amount of benefits may have been meager--despite the Reagan-era myths about "welfare queens" driving Cadillacs--but it was there if you needed it.

In other words, welfare worked in a very similar way to how Medicaid works today. But Bill Clinton did away with all that.

PRWORA replaced the existing welfare system with the Temporary Assistance for Needy Families (TANF) program, which requires recipients to get a job within 24 months of receiving aid and caps lifetime benefits at 60 months. (It also, just to give a further insight into the spirit in which the law was drafted, denies benefits to legal immigrants until they been resident in the US for at least five years.)

PRWORA imposed similar restrictions on the federal Food Stamp program, which has since been rebranded the Supplemental Nutrition Assistance Program (SNAP). Here, too, participants can lose their benefits if they don't satisfy new work requirements.

Significantly for the comparison to Medicaid, PRWORA also did away with unlimited federal matching for state welfare expenditures. Instead, each state currently receives a predetermined block grant every year. Once the grant is spent, that's it: no more federal aid is available, no matter how many people need and qualify for it.

This is what many of the recent Republican proposals to "repeal and replace" Obamacare looked like: similar block-grant schemes applied to Medicaid funding, and it seems certain the GOP will try again this coming year.

Thus, what Clinton's welfare "reform" meant--and what work requirements could mean for Medicaid--was the end of anything approaching a genuine safety net for the poorest and most vulnerable Americans.

Rather than distribute aid on the basis of need, the government was making it clear that if you are poor and need assistance, you may--provided you play by all of the rules--receive a little bit of help for a little while. But beyond that, getting out of the situation is--in the classic neoliberal phrase--your "personal responsibility".

The effect of all this was entirely too predictable. As Tristan Adie wrote for in August 2016, on the 20th anniversary of welfare "reform":

The net effect of Clinton's reforms has been an overall increase in the poverty rate, from 13.7 percent in 1996 to 14.8 percent in 2014. About one in every seven Americans lives below the official poverty line.

The rise in extreme poverty--Americans who live on less than $2 per day--increased by 159 percent between 1996 and 2011. In the richest country on earth, a total of 1.65 million households are trying to survive on this meager amount.

Structural racism--manifested in the job market, the criminal justice system and educational apartheid--meant that welfare reform hit Black and Latino families hardest.

Despite these appalling statistics, TANF's advocates continue to paint welfare "reform" as a major success, for the simple reason that it reduced the number of people on welfare. Not the least thought was given to what happens to the people ejected from the rolls--– no doubt because their fate is a matter of their own "personal responsibility."

Medicaid is clearly under serious threat today--as, indeed, it has been ever since Trump took office. We should fight to defend the system, as we fought to defend elements of the deeply flawed health care system under Obamacare against the repeated and sustained attacks of the past year.

But even as we battle to preserve the health care we have, we must continue to press vigorously for the one system that would be immune to all such attacks: a single-payer, everybody-in, nobody-out, truly universal health care system that works for all people.

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