LA Medicaid work requirements good, if done right

Work requirements in Louisiana for able-bodied adults without disabilities to enroll in Medicaid make a lot of sense, even if it would not save much money. It’s just its effective implementation that gets tricky.

SB 188 by state Sen. Sharon Hewitt would require this category of Medicaid enrollees to fulfill a “community engagement” standard, defined as employment, volunteer work, caretaking, job training, education, or job search activities comprising at least 20 hours a week. The bill would exempt many from the requirement, essentially those who care for dependents of some kind. Last week the Senate Health and Welfare Committee took up the bill, but in the face of opposition Hewitt deferred the bill in favor of a study resolution.

The notion build upon successful application of work policies in other federal programs such as the Supplemental Nutritional Assistance Program that distributes vouchers for food and drink for lower-income households. However, it would not act as a panacea to rein in runaway Medicaid costs, given the tightly drawn nature of this measure, which mimics those in a handful of other states. Only roughly 11 percent of current Medicaid recipients – jobless able-bodied adults without dependents (ABAWD) – fit the bill, and using a slightly lower percentage the Legislative Fiscal Office saw for next year only about $7 million saved, not including $4 million in initial costs, nor a small annual cost to review client eligibility, nor continuing reduction in the 5.5 percent premium tax charged on managed care policies into which Medicaid clients enroll.

Achieving these small savings also runs into the reality of Louisiana’s outdated laws regarding indigent provision of health care that allow free treatment of anybody with less than 200 percent of Federal Poverty Limit income. That is, somebody in that income range, if not meeting a requirement like that in SB 188 to sign up for Medicaid, simply opts out and whenever feeling the need just shows up at a charity hospital for free. As for people below the 138 percent level, they also can pass and in the future take advantage of the Emergency Medical Treatment and Labor Act to receive all but primary care from any qualified provider without cost.

In other words, tying the requirement directly onto Medicaid would provide little incentive to work, then additionally launches a political argument about denying care to individuals with serious conditions only because they do not work. Savings might dwindle to the point the additional eligibility determination costs actually exceed these.

A better approach piggybacks on information collection efforts already underway. For example, Medicaid clients almost universally qualify as SNAP beneficiaries, and, courtesy of an executive order from Gov. John Bel Edwards last year, the same population envisioned as covered under SB 188 must meet certain eligibility standards.

Yet the order imposes such weak requirements that it does next to nothing to encourage work and discourage dependency. Unlike places such as Maine, where SNAP eligibility requirements for ABAWD clientele as does SB 188 ask for 20 hours a week minimum of work, training, or service, Edwards’ order merely requires affirmation of looking of work if not training. Thus, while Maine’s SNAP ABAWD caseload dropped around 80 percent in just a few months after the reform, Louisiana’s adult clientele totals hardly have budged from last June through this March, actually increasing slightly in the 491,000 range.

Going forward, future legislation should not reinvent the eligibility determination wheel by tying into for ABAWD something like information already gathered for SNAP, but at the realistic standard proposed in SB 188. Other approaches largely would negate the beneficial impact of the idea that Medicaid recipients should make a good-faith effort to contribute to society in exchange for the gift of health care.