The controversial Medicaid Work Requirement Rule, sponsored by Senator Mike Shirkey (MI-R), representing Branch, Hillsdale, and Jackson counties, passed the Senate (Bill 897) on June 7, 2018 and was signed by Governor Rick Snyder on June 22, 2018.
Medicaid work requirement legislation is expected to become law effective January 1, 2020 pending approval by the Center for Medicare and Medicaid Services (CMMS).
The bill originally proposed recipients to work 29 hours per week but was dropped to 80 hours per month (20 hours/week) in order to pass the Michigan House vote. The effective date of the legislation was also extended from October 2019 to January 2020.
As part of the negotiations and due to racial allegations, work requirement exemptions in counties with unemployment rates at 8.5% or higher was also eliminated.
Some highlights of the final bill signed into law are as follows:
Please review the link to SB 897 for a complete list of requirements and exemptions.
The goal of proponents for legislative changes to the Michigan Medicaid bill claim that it will restore dignity and self-sufficiency, improve health outcomes, close gaps in labor supply, and save taxpayers money by moving able-bodied, working-age people off federal insurance rolls.
The basic logic of Medicaid work requirements has four components:
Local Workforce: Supply and Demand
The Trump administration persists in taking credit for the flourishing economy and maintains that its policies incentivizes low-income Americans to return to the labor force while providing qualified workers to employers who will continue to grow the economy.
However, a recent analysis, published in the LinkedIn Workforce Report (October 2018) shows a 1.6% drop in hiring rates in Detroit due to a skills gap and migration patterns in the region. Data is based on trends from September 2017 through September 2018.
That is, employers are not finding qualified workers because more unskilled workers are moving in and those likely possessing the needed skills are moving out.
The report tracks U.S. workforce hiring trends derived from comparison data of job postings and member profiles posted on LinkedIn. It is a valuable resource for those seeking employment opportunities throughout the country, especially in large Metropolitan cities.
Data provided in the LinkedIn report provides information on surplus skills (supply) in the area and skill shortages (demand) needed by employers. As well, we can identify the number of workers moving in and out of the area, where their migrating from, where they are migrating to, and how this factor impacts the local job market.
A link is provided below to the LinkedIn report.
Medicaid Enrollment and Costs in Michigan
According to the Michigan Department of Health and Human Services (MDHHS), there were 1,858,112 Medicaid cases in FY17 from October 2016 to September 2017, through which 2,920,176 total individual recipients received health insurance benefits.
MDHHS reported a total of 1,767,618 Medicaid recipients in FY15 after the Obamacare expansion became effective 4/1/14.
Of the nearly 3 million people across 83 counties in Michigan who received Medicaid benefits in FY17, an estimated 700,000 gained coverage through ACA’s expansion provision.
The annual expense for Medicaid in the State of Michigan is an estimated $16 billion in healthcare coverage.
Medicaid benefits are provided in six (6) broad categories:
According to the Kaiser Family Foundation (2016), 27% of Michigan’s population (9.9 million) are low-income with 21% receiving health benefits under Medicaid programs.
The Kaiser Foundation study reports 70% of Medicaid enrollees are adults and children expending 30% of the costs; while 22% are elderly and disabled accounting for 62% of all funding expenditures.
*The following table is an overview of Michigan Medicaid recipients per county (FY17).
Source: Total Eligible Medicaid Case and Recipient Annual Information, FY17 - Michigan Department of Health and Human Services (MDHHS)
Exemptions and Who Will Be Affected
The Medicaid work requirement rule will generally apply to able-bodied adults and particularly those on the Healthy Michigan plan added through Obamacare.
There are twelve (12) categories of exemptions for Medicaid recipients as follows:
Medicaid Work Requirements and In-Work Poverty
When we look at the work requirement rule we must consider how and why employed workers may still lose their benefits.
We have already established that most Medicaid recipients already work. However, since they are mostly uncounted in the labor force and in welfare budgets, there is no real way to know how often they work (e.g. seasonal, temporary) and how many hours (e.g. part-time, full-time).
But, just to give us an idea.
According to the Bureau of Labor Statistics (2018), there were 4,909,907 jobs in Michigan as of July 2018, of which 4,697,925 were filled (that is, 4,697,925 people were employed). Only 211,982 people were unemployed at a rate of 4.3% of the Michigan population.
Of course, this does not account for concentrated pockets of poverty and unemployment in certain counties and cities in the state. Still, it does substantiate the point that most Medicaid recipients in the area are currently employed but remain in jeopardy of losing their health benefits.
One reason that employed Medicaid recipients may lose their health insurance coverage due to the new work requirement rule is that many are low-skilled workers with temporary and part-time employment. Others may be skilled tradesman but are still affected due to seasonal work. This is problematic for claims that there is an untapped reserve of millions of qualified workers among low-income Americans on welfare who are needed to fill gaps in the labor force and continue to grow the economy.
According to the U.S. Census Bureau’s Survey of Income and Program Participation Report (SIPP, 2012), the largest proportion (33.5%) of participants in means-tested (welfare) programs were unemployed workers. That is, unemployed workers are likely those receiving Unemployment Insurance (UI) benefits.
However, another 25.3% of the unemployed discouraged workers (those not participating in the labor force at all) participated in major welfare programs including Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Another 17.6% of part-time workers and 6.7% of full-time workers received welfare benefits.
But, those are the national numbers.
Here in Michigan, if we consider the MDHHS Annual Caseload Report (Table 1), we can see that county unemployment rates throughout the state run no higher than 9%, yet most of those counties present, at minimal, almost one (1) quarter to nearly half of their population as receiving Medicaid and other welfare benefits.
That is, again, the majority of participants in the Medicaid program already work but continue to live in poverty, lack employer-sponsored health coverage, and so on. This is what we refer to as in-work poverty.
Medicaid Recipients in Michigan
According the Michigan Department of Health and Human Services (MDHHS), as of September FY2017 with a population of 9.962 million, there were 2,920,176 million recipients of Medicaid. The U.S. Census Bureau reports the population statistics of Wayne County as of July 2017 at 1.753,616 with almost 46% receiving Medicaid benefits (see the MDHHS report).
The poverty rate in Wayne County was 22.9% with unemployment at 6.3% during this same period, by the way.
Do we need any more proof that most people on Medicaid are already employed?
It should be noted that each Medicaid case and recipient was counted as receiving benefits at least once during the fiscal year (2017) and does not specify the length of time they were on Medicaid nor any other form of assistance received.
As such, in the numbers of Michigan Medicaid enrollees, the MDHHS report does not indicate how many recipients were employed and, if employed, were they working full or part-time, temporary or seasonal. But the Bureau of Labor Statistics reported a 4.3% unemployment rate in the region during the same period.
So, it is safe to say that most Medicaid recipients have jobs. That means, not only are employed Medicaid enrollees receiving federal health insurance benefits, they are also paying taxes.
Then, the question is how much in purported tax savings is there for non-Medicaid workers?
Still, some complain that the Healthy Michigan plan, targeted to low-income workers or the “working poor” through the Obamacare expansion in 2014 is unsustainable and needs to be reformed. According to the Michigan Chamber of Commerce, the Healthy Michigan program is over-enrolled and underfunded (Detroit Free Press, April 2018).
But, we’ll save the discussion on how and how much Medicaid is funded for a later date.
Michigan Senate Bill 897 – Medicaid Work Requirement Rule
In the final draft of Senate Bill 897 which proposed changes to the Medicaid program in effect established new eligibility criteria.
In order to continue eligibility for Medicaid benefits recipients will be required to:
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Healthy Michigan Plan Work Requirements and Premium Payment Requirements (SB 897)
LinkedIn Workforce Report – Detroit, October 2018
MDHHS Total Eligible Medicaid Cases and Recipients (FY2017)
U.S. Department of Labor – Bureau of Labor Statistics Databases, Tables & Calculations
U.S. Department of Labor – Bureau of Labor Statistics, Midwest Information Office, Michigan
U.S. Census Bureau Quick Facts – Wayne County, Michigan
Have Medicaid? New Michigan Bill May Force You to Work (April 2018)
Confused About Michigan Medicaid Reform? These Maps and Charts Explain It All (May ’18)
Snyder: Deal on Medicaid Work Rules is ‘Basically There’ (June 2018)
Michigan and the ACA’s Medicaid Expansion (June 2018)
Snyder Signs 80 Hour Medicaid Work Requirement Law
Michigan Bill Forces Medicaid Recipients to Work 80 Hours Per Month (June 2018)
Welfare Work Requirements Will Ease Poverty and Improve Our Workforce (July 2018)
Some on Medicaid Must Adopt A ‘Healthy Behavior’ or Lose Coverage
Welcome to The Community Advocate Network. My name is Deborah Mitchell, I am a graduate in Social Work and Registered Social Work Technician. My human service background began in 2007 which includes medical case management and service navigation for the indigent population, outpatient mental health counseling with substance use and abuse disorders, supportive employment and job development for mental health consumers, and structured living domicile management.