Column: Work requirements can save Medicaid

Justin Haskins and Matthew Glans

Medicaid is an important welfare program that was designed to provide those most in need with health insurance, but in recent years, Medicaid has grown at an out-of-control rate. Without reform, significant tax increases or cuts will need to be made to keep the program operating, hurting families.

As in nearly every other state that has expanded Medicaid, the cost of Michigan’s Medicaid program has been increasing at an unsustainable pace. Michigan’s Medicaid spending increased by a total of 35.5 percent between fiscal years 2012 and 2016, and during the 2016 fiscal year, the Kaiser Family Foundation reports combined federal and state spending for Michigan’s Medicaid program totaled approximately $16.9 billion.

Since Medicaid eligibility was expanded under the Affordable Care Act in 2013, more than 680,000 lower-income residents have enrolled in Healthy Michigan, the state’s expanded Medicaid program — a figure that’s much greater than the original projection of 470,000. More than two million people are now enrolled in the state’s Medicaid plan.

Thankfully, some state lawmakers are working to pass reforms that will help guarantee Medicaid’s future in Michigan is on firm ground. In March, state Sen. Mike Shirkey, R-Clark Lake, introduced legislation that would require able-bodied adults to perform 29 hours of work, job training, or education every week to continue to be enrolled in Medicaid. Pregnant women, people suffering from medical disabilities, students, caretakers, and others would be exempted from the requirements.

Shirkey’s legislation comes just a few months after the Trump administration’s Centers for Medicare and Medicaid Services issued a new guidance to state Medicaid directors permitting them to create work and community engagement requirements for able-bodied Medicaid recipients. This much-needed reform had never been allowed previously by the federal government, which means Michigan and other states now have a historic opportunity to institute commonsense reforms.

Work requirements are perhaps the most important reform a state can make to its welfare programs. They help keep Medicaid costs down and encourage self-sufficiency by making it burdensome for recipients who could work but aren’t seeking employment to stay enrolled, while providing plenty of opportunities for low-income people who need temporary aid while they build their resumes, look for jobs, or receive job training or education. The primary goal of work requirements is to break the cycle of poverty and discourage abuse.

Because Medicaid-specific work requirements are relatively new, some pundits and politicians say they won’t work. Decades of data showing the success of work requirements in other welfare programs disproves those arguments, however. For instance, before the Republican-led Congress and President Bill Clinton passed welfare reform for America’s Temporary Assistance for Needy Families (TANF) program in 1996 — which included work requirements — there were 13.4 million Americans enrolled in the program. However, almost immediately after welfare reform was approved, rolls suddenly declined dramatically and millions of people found jobs. Since 1996, enrollment in TANF has declined by about 73 percent.

Similarly, after Maine policymakers instituted work requirements to the state’s Supplemental Assistance for Needy Families program, commonly called “food stamps,” the number of able-bodied adults without dependent children in the program dropped by 80 percent in fewer than six months.

To save Medicaid, Michigan must pass similar reforms. It simply can’t afford to wait any longer to make vital changes.

Justin Haskins is executive editor and a research fellow at The Heartland Institute. Matthew Glans is the senior policy analyst there.