State Senate approves multi-million dollar program to promote ‘Iowa work ethic’ among Medicaid recipients

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The State Capitol shown on Friday, July 21, 2017. — photo by Zak Neumann

The Republican-led Iowa Senate passed a bill imposing work requirements on Medicaid recipients on a party line vote on Tuesday. SF538 would require Iowans determined to be “able-bodied” to work at least 20 hours a week at a job or as a community volunteer, or to attend school for that amount of time, in order to receive Medicaid. Medicaid enrollees would need to report their status to the Iowa Department of Human Services (DHS) twice a year.

Medicaid “provides health coverage for some low-income people, families and children, pregnant women, the elderly, and people with disabilities. In some states the program covers all low-income adults below a certain income level,” the U.S. Department of Health and Human Services explains on it site. The program is primarily funded by the federal government but also uses state funds, and state governments are largely responsible for administering it.

The Iowa Health and Wellness Plan, the name the state uses for its Medicaid program, covers approximately 167,000 Iowans.

“It’s not only good policy, it’s moral,” said Sen. Jason Schultz, a Republican from Schleswig and the bill’s floor manager, during the Senate debate. He said, “If there’s nothing holding you back [from working] except your own decision not to go forward, we’re going to bump you forward.”

Republican Sen. Jerry Behn of Boone called it “a bill that we are in dire need of.”

But an analysis published last June by the Kaiser Family Foundation found that only 6 percent of Medicaid enrollees nationwide that would be considered able-bodied were not either employed or in school. That analysis also warned that work eligibility programs are likely to strip Medicaid from people who should still receive it.

According to the analysis, “since one in three Medicaid adults never use a computer or the internet and four in ten do not use email, many enrollees would face barriers in complying with work reporting requirements to maintain coverage.”

The analysis also found there will likely be problems in determining who is able-bodied.

A quarter of non-working Medicaid adults [who aren’t classified as disabled by the Social Security Administration] have mobility or physical limitations such as difficulty going up or down stairs (24%), walking 100 yards (25%), sitting or standing for extended periods (27%), or stooping, kneeling or bending (24%). Many live with daily, activity-limiting pain.

The analysis also said, “Among the ‘able bodied,’ or those in good health or better, most say the reason they are not working is because they are taking care of home or family or are in school.”

Senate Democrats pushed back against SF538 as unnecessary and expensive.

“You are creating a massive bureaucracy, new bureaucracy, of state employees to basically harass people that are in poverty, trying to make ends meet,” said Sen. Joe Bolkcom of Iowa City.

In the fiscal note prepared for the bill, the nonpartisan Legislative Services Agency (LSA) estimated that under SF538, the status of almost 71,000 Medicaid enrollees would need to be monitored. Even if each status review only takes 10 minutes, DHS would still have to hire new personnel and create new procedures.


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LSA estimated that administering the work requirement would cost the state $4,977,222 during its first year, with that amount rising to $11,892,248 in the following year.

Still, Senate Republicans unanimously voted in favor of the bill Schultz said would improve the declining “Iowa work ethic.”

The bill now goes to the Republican-led of Iowa House of Representatives for approval.

Even if SF538 passes the House and is signed into law by Gov. Kim Reynolds, the state would still need a waiver from the Centers for Medicare and Medicaid Services to implement the program. The Trump administration favors state’s introducing work requirements for Medicaid and has granted waivers to eight states, and is currently reviewing another seven applications.

Only Arkansas has so far implemented a work requirement for Medicaid enrollees. The results have been dramatic. Between June 2018, when Arkansas began to implement its work requirements, and the beginning of this year, 18,164 people were removed from the state’s Medicaid program because of those requirements. According the “new hires” database maintained by the Arkansas Department of Human Services, only 1,981 of those people have found jobs as of March 15. (Since the database doesn’t distinguish between permanent and temporary or seasonal jobs, it may overstate the number currently employed.)

The first state to receive a waiver from the Trump administration to impose Medicaid work requirement was Kentucky in January 2018, but a federal judge issued an injunction preventing that program from going into effect. According to the judge’s ruling, the program did nothing to advance Medicaid’s core purpose of providing health care.

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