Nearly 200,000 Michiganders could lose Medicaid coverage under work requirements proposed by congressional Republicans this week, even though most are already working or qualify for an exemption.
That’s according to a recent analysis by the Urban Institute, which found that nationally, nearly 9 in 10 adults ages 19 to 64 with Medicaid expansion coverage “already work, are looking for a job, attend school, are caring for family members, are in fair or poor health, or reported having a disability."
Instead, many would lose coverage simply because they’d fail to properly navigate the reporting requirements, said Katherine Hempstead, a senior policy officer at the Robert Wood Johnson Foundation.
“The way it makes money is when people are not able to comply with the clunky, kludgy system that every state sets up for people to report their hours,” she said. “And then they lose their coverage, even though the vast majority of people that will lose their coverage are actually eligible, because they are working or doing some other exempt activity.”
The estimates of the numbers of people who could lose coverage are roughly in line with what Michigan Department of Health and Human Services is predicting.
“Sixty percent of people in the Healthy Michigan plan are already working, students, or homemakers, and many others are medically frail,” Meghan Groen, senior deputy director at the health department, said in a briefing last week.
“It's estimated that between 100,000 and 290,000 beneficiaries would lose coverage in the first year, and that's if work requirements apply only to the expansion population,” Groen said.
But Trump administration officials, and leading congressional Republicans, argue Medicaid work requirements are common sense. “The increased share of welfare spending dedicated to able-bodied working-age adults distracts from what should be the focus of these programs: the truly needy,” Robert F. Kennedy Jr., Mehmet Oz, Brooke Rollins and Scott Turner wrote in a New York Times op-ed on Wednesday.
And the Congressional Budget Office estimates the proposed work requirements alone would also save the federal government $30 billion in the first year alone, according to a KFF analysis.
What work requirements are being proposed?
The most recent version of the work requirement proposal this week required adults age 19 to 64 to be able to show they worked 80 hours a month, Hempstead said, though there would be exemptions.
People could show they had “some kind of work, or acceptable work substitute, such as attending school or job training or volunteering or something else,” she said. “Or they may be able to show that they're exempt from that requirement because they have a caregiving responsibility to a child or to maybe a parent or some other like disabled relative. Or there will be some exemptions for people who have physical or mental health issues that keep them from working.”
But the details are still being hammered out, including the proposed start date, with some Republicans pushing congressional leaders to move up the initial 2029 timeline, according to The Hill.
Michigan expanded its Medicaid program in 2014, creating the Healthy Michigan Plan, which currently covers more than 700,000 residents. The expansion program covers adults 19 to 64 years old, “incomes up to 133% of the federal poverty level, [who] do not qualify for Medicare or traditional Medicaid, and meet Michigan residency and Medicaid citizenship requirements,” according to a recent state health department analysis.
In 2018, then-Governor Rick Snyder signed a law creating Medicaid work requirements, which was expected to cost “nearly $70 million in administrative funds,” according to the health department. But in 2020, a federal judge ruled the work requirements were illegal. By that point, “more than $30 million was spent on IT system upgrades, staff training, and beneficiary outreach,” according to the state.
Today, state health officials estimate Medicaid work requirements for Healthy Michigan recipients would cost the state about $75 million in administrative costs. But the state could also experience broader impacts, from a rise in uncompensated care, where physicians provide health care that winds up going unpaid, to strain on rural hospitals that primarily serve Medicaid patients. There could also be a drop in the number of children covered by Medicaid, if parents who lose coverage are less likely to enroll their kids.
“Research shows that Medicaid coverage for children is associated with improved health outcomes, higher educational attainment, increased future earnings, and greater tax contributions. The loss of these long-term benefits would represent a significant setback, both for the individuals affected and the state as a whole,” the state’s analysis concluded.
