Opinion: Enforcing work requirements is a waste

Nicholas Bagley

On Tuesday, Gov. Gretchen Whitmer pleaded with the Legislature to work with her to prevent the state from making a bonfire out of tens of millions of taxpayer dollars. You might have thought that the Legislature, which prides itself on stopping wasteful government spending, would have been happy to work with her.

Both the House and Senate leadership, however, have spurned the request. Instead of putting out the fire, the Legislature is lighting a match.

Flanked by  Senate Majority leader Mike Shirkey, left, and Speaker of the House Lee Chatfield Gov. Gretchen Whitmer delivers her State of the State speech.

The controversy surrounds work requirements for the state’s Medicaid program, which provides health insurance for the poor. Normally, anyone who earns below a particular income threshold is eligible for Medicaid.

In a law passed in the waning days of the Snyder administration, however, the Legislature told Michigan health officials to ask for permission from the Trump administration to add work requirements to Medicaid. The Trump administration obliged, and work requirements are set to take effect on January 2020.

Under the new rules, non-exempt beneficiaries must report how many hours they work each month. If they fail to file on time, or work fewer than 80 hours in a month, they’ll lose their Medicaid coverage.

The website for the state's Healthy warns people of upcoming changes to the program. The changes are new work requirements for some participants.

It’s a harsh policy, and it’s been really damaging in other states. Most Medicaid beneficiaries already work, and those who don’t work are usually disabled, in school, or caring for a dependent. So work requirements can’t do much to get people into the workforce.

But loads of people are likely to lose coverage because they can’t manage the paperwork associated with reporting their hours. A recent study out of Arkansas, for example, showed that one in four people subject to work requirements lost their coverage in the first year. The vast majority of those people were actually working or were otherwise exempt. Employment rates stayed flat.

Work requirements are such a bad idea, in fact, that they’ve been challenged in court. Already, a judge in Washington, D.C., has invalidated work requirements in Arkansas, Kentucky, and New Hampshire. Those cases were appealed, and a panel of the U.S. Court of Appeals for the D.C. Circuit has signaled that it’s also no fan of the new rules. Its decision could come down any day.

In the meantime, a nearly identical lawsuit against Michigan’s work requirements was filed last week in front of the same judge. He’s overwhelmingly likely to put a stop to Michigan’s work requirements, just like he put a stop to those in Arkansas, Kentucky, and New Hampshire. The writing is on the wall.

State officials in Michigan, however, are still subject to the Snyder-era law requiring them to roll out work requirements in January. So far, the state has spent $28 million implementing them and is poised to spend $40 million more in the coming year. This month, for example, the Whitmer administration will have to spend $1 million just to send detailed compliance information to about 200,000 Michiganians.

Even if you believe in work requirements, it makes zero sense to spend millions on a program that the courts are going to halt anyway. That’s why a bunch of deep red states, including Arizona, Indiana, and Montana, have all put their work requirements on pause while the litigation works its way to the Supreme Court.

Michigan should do the same. The Legislature and Whitmer may be at each other’s throats over roads and budgets, but this is not a partisan issue. It’s about fiscal prudence.

The Legislature, however, appears content to let taxpayer money burn.

Nicholas Bagley is a professor of law at the University of Michigan Law School.