The letter, sent to the state on Tuesday, says that under the Social Security Act, the federal government can permit special programs that go outside the bounds of how Medicaid is set up, as long as they “are likely to promote the statutory objectives of Medicaid.”
Work requirements would not do this because they would likely result in thousands of people losing coverage, the letter states.
“We do not have information before us that suggests that the state’s employment related services are likely to reduce the risk that Ohio’s (work requirements) will result in substantial coverage losses at a time when losing access to health care coverage would cause particularly significant harm to beneficiaries,” the letter states.
This is a change from the administration of former President Donald Trump, which had approved the state’s work requirements program in 2019. The Ohio Department of Medicaid was directed to submit a work requirement program by the Ohio General Assembly in the 2017 budget bill.
Yet the work requirements hadn’t been implemented In Ohio.
Work requirements were supposed to begin Jan. 1, but the coronavirus pandemic postponed that, since Ohioans had become unemployed or lost their employer-sponsored health insurance and were relying on Medicaid for coverage. Some people who get the coronavirus are considered “long haulers” because they have symptoms for months after the initial illness and need health coverage as they continue to visit doctors.
The state has a right to appeal the decision.
Gov. Mike DeWine, in a Wednesday morning statement, called the decision disappointing.
“Ohio’s reasonable approach provided individuals with options while supporting them on their way to self-sufficiency,” he said. “The Biden Administration’s decision was shortsighted and contrary to our statewide effort to improve public health. By requiring an individual to work, learn new job skills, or be involved in a recovery program, Ohioans would be providing critical assistance to individuals when they needed it while laying the groundwork for their success in the future.”
U.S. Sen. Rob Portman, a Cincinnati Republican, said that work requirements provide states flexibility, help Medicaid beneficiaries and slow “the growth rate of Medicaid, and thus the burden on taxpayers. I will continue to advocate for bipartisan common-sense solutions to address the affordability of health care and the long-term budget implications of Medicaid on the state and federal level.”
U.S. Sen. Sherrod Brown, a Cleveland Democrat, said work requirements are burdensome.
“We should be making it easier for Ohioans to access care, not harder – especially at a time when Ohioans are fighting against the COVID-19 global pandemic,” he said.
Coverage Loss
In its letter to the state, the federal government cites research from the Commonwealth Fund, which estimates that 121,000 to 163,000 Ohio Medicaid beneficiaries could lose coverage in the first 12 months of full implementation of work requirements.
That would represent 26 percent to 35 percent of the total estimated group who would be subject to work requirements in Ohio.
The state’s work requirement plan approved under the Trump administration only imposed work requirements on people in Medicaid under Medicaid expansion, which means they have low incomes. It doesn’t impose the requirements on people in other categories of Medicaid - such as people who are aged, blind or disabled.
But not all Medicaid expansion enrollees would have to work. There were exceptions – for people age 50 and older, people enrolled full-time in college, career training or a GED program, those who have physical or mental health frailties, people in treatment for substance use disorders, caregivers of minor children, among other exemptions.
The requirement was for 80 hours a month of work. These are aspects of the work requirements plan that state officials such as DeWine refer to when saying the state’s plan was reasonable.
However, the letter notes that an analysis from the Kaiser Family Foundation found 68 percent of Ohio Medicaid recipients ages 19 to 64 without Supplemental Security Income were working in 2019. That’s higher than the national average of 64 percent of Medicaid enrollees who worked.
Problems with Ohio Benefits
The letter also refers to the well-documented problems with the $1.2 billion online and mobile system called Ohio Benefits, which people use to enroll in public benefits programs - including Medicaid. It noted that glitches with Ohio Benefits resulted in documents needed to confirm eligibility being misplaced or eliminated. Some people had been given incorrect dates by which they needed to renew their eligibility for Medicaid.
The letter noted that Ohio Auditor Keith Faber’s office conducted an audit of Ohio Benefits and found serious error rates with determining eligibility, a backlog in application processing and other issues.
“Against the backdrop of these documented challenges to the state’s Medicaid eligibility determination system, Ohio may face even greater challenges with preparing clear and effective notices to beneficiaries with accurate information, and even if beneficiaries received, understood, and responded to notices, there could be complications with accurately recording compliance with or exemption or exception from the (work) requirement,” the letter states.
Seesaw Effect
Ohio is just one state with work requirements being eyed by the Biden administration.
Last month, it withdrew approval of work requirements for Indiana and Arizona. It recently told Montana it would not approve a proposal for work requirements in its Medicaid expansion program. The Biden administration has sent letters to other states with work requirements, such as Utah, signaling it will likely rescind previous approval for work requirements.
While the Obama administration rejected states’ requests to implement work requirements, the Trump administration encouraged states to implement them. Now that Biden is rejecting them, the question is when a future Republican president will allow them.
The seesaw effect may ultimately mean little will change in the long term for the states that want to implement work requirements. They can just shelve their previously approved plans, wait for another GOP administration in Washington and try to begin work requirements again-until another a future Democratic administration objects to them.
But that doesn’t take into account the courts. Even Ohio’s Medicaid work requirement dispute could end up before a judge, said Loren Anthes, a senior fellow at the Cleveland-based think tank, the Center for Community Solutions.
Anthes believes that the U.S. Supreme Court will ultimately make the final determination about whether work requirements violate the Social Security Act and are constitutional.
Anthes - who believes Ohio’s work requirement will create confusion and will toss people off Medicaid rolls - is encouraged by court rulings knocking down Arkansas’ and New Hampshire’s requirements.
“Court rulings do help because it creates a precedent that these policy experiments do not conform with the Social Security Act,” he said.
The U.S. Supreme Court had said it would hear the case over the legality of the Arkansas and New Hampshire work requirements in March, but then removed it from its docket on request of the Biden administration, since it was taking a different stance on the issue than the Trump administration. However, the high court has not ruled on a separate request from the Biden administration to vacate lower court decisions in the Arkansas and New Hampshire cases.
That means the issue is not going away.
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