I have Medicaid but got a new job | What should i do?
State policies that require low-income adults to work to keep their Medicaid coverage have gained traction and sparked debate. Twenty states have proposed a “community engagement” requirement, aided by the Centers for Medicare & Medicaid Services (CMS). These proposals typically call for Medicaid recipients to work a certain number of hours per week (usually 20), participate in job training or community service, or obtain an exemption.
Work requirements have now been approved in ten states, though many are challenged in court. For example, Only Arkansas fully implemented the policy before a federal judge issued an injunction prohibiting the practice in Arkansas, Kentucky, and New Hampshire, which a federal appeals court upheld. In addition, the state of Michigan’s policy is being challenged in federal court.
Keeping an Eye on Expansion Status:
Until recently, CMS only approved work requirements for states that expanded Medicaid under the Affordable Care Act (ACA)—coming to Wisconsin, which already made all low-income adults eligible for Medicaid despite not participating in the ACA expansion. However, South Carolina received approval in December 2019 to impose work requirements on low-income parents, making it the first traditional non-expansion state to do so. This context raises concerns about the nation’s ongoing experimentation with work requirements and necessitates further investigation into how it might play out based on each state’s expansion status and enrollee characteristics.
CMS work requirements
Despite its overall support for work requirements, CMS rejected a Mississippi proposal in 2018, claiming that the state’s lack of Medicaid expansion made work requirements difficult due to a phenomenon known as a “subsidy cliff.” For example, suppose a beneficiary obtains a new job to meet the criteria in most non-expansion states. In that situation, the additional income may make the person ineligible for Medicaid but still too low to qualify for subsidized private care under the ACA. CMS stated that this policy is illogical since it would require people to have their health coverage but then remove it once they found another job.
South Carolina and CMS dealt with this complication by combining the new work requirements with a limited expansion of Medicaid eligibility, effectively raising the effective income threshold for low-income parents from 67 % to 100 % of the poverty line. Meanwhile, childless adults (the ACA’s Medicaid expansion) in the state remain ineligible for Medicaid.
Before South Carolina, the debate over work requirements was frequently framed as a necessary compromise to gain the support of conservative policymakers for Medicaid expansion, as in Virginia and Utah (though Virginia subsequently paused implementation of its work requirements). The compromise in South Carolina was a more modest expansion of coverage to a smaller subset of the population, which many critics argue is insufficient to justify a policy resulting in significant Medicaid enrollment losses.
Arkansas Points of View
What do we know about how the policy will be implemented in South Carolina, aside from politics? There are two valuable sources of information: South Carolina’s proposal to CMS and research into Arkansas’s pioneering Medicaid work requirements.
In their application, South Carolina officials predicted that 7100 low-income parents would lose Medicaid coverage because they “will elect not to comply” with the new requirements, accounting for less than 4% of the estimated 188 000 Medicaid beneficiaries affected by the policy.
In Arkansas, for example, nearly 18 000 adults (roughly 30%) lost Medicaid coverage before the courts intervened, out of almost 61 000 subjected to the requirements before the courts intervened.
Is South Carolina’s forecast trustworthy? One of the most critical findings from Arkansas was the number of people confused about work requirements, with one out of every three adult Medicaid beneficiaries reporting that they had never heard of the policy.
The key to understanding coverage losses, it turns out, is not whether people are already meeting the requirements—more than 95 percent of those in Arkansas were.
It is instead the reporting of “community engagement” that is critical. In Arkansas, most of those who maintained their coverage were never questioned by the state because they already knew they were complying based on state data sources such as income taxes.
Only about 20% of the nearly 20 000 people who were required to report information to the state did so, with the rest losing coverage. In other words, the main impediment to maintaining coverage is red tape. In light of this outcome, South Carolina officials hope to exempt 168 000 of the 188 000 Medicaid beneficiaries from reporting data to the state, which is an essential step toward reducing potential coverage loss.
However, this leaves 20 000 South Carolinians subject to a new requirement and at risk of losing coverage if they cannot navigate the state’s reporting system. Another concern is that South Carolina’s policy targets low-income parents, which previous research suggests may reduce Medicaid enrollment among children.
So the question is, what can South Carolina reasonably expect from this policy in terms of financial security and health coverage?
CMS claims that increasing work requirements will lead to more employment and a poverty reduction. This claim is not supported by evidence from Arkansas. Our team compared Arkansas to three other southern states in a 2019 study and found no significant increase in employment, hours worked, or other community engagement activities. The majority of those targeted by the police were already employed or disabled.
Medicaid coverage losses exceeded 10%, with no significant increases in employer-sponsored insurance to make up the difference. By the end of the first year, the policy had resulted in more uninsured adults, high administrative costs for the state, and no change in the economic outcomes that the policy sought.
We offer two critical lessons as South Carolina embarks on its work-requirement experiment, with other non-expansion states likely to follow suit. The first is that administrative details are essential behind the scenes.
To its credit, South Carolina appears to be prioritizing steps to reduce the reporting burden for many beneficiaries, which will likely limit the scope of potential coverage losses. The second point is that, even with these measures, there is reason to believe that work requirements will not achieve their stated goal of improving the financial circumstances of low-income adults in the state.
Still, you would be out of work until you found a new job, so you would most likely qualify (especially in a state with expansion). The best bet is to contact healthcare.gov or your state’s Medicaid office. I