Medical Assistance work rule might not cut costs

Republican proposal would be costly to administer.

Republican legislators say the best interests of poor Minnesotans are behind their move this week to add a work requirement to Medical Assistance, Minnesota's version of Medicaid and the source of health insurance for about 1 million state residents. "Our goal is not to leave them trapped, just because they are safer," explained Sen. Michelle Benson, R-Ham Lake.

That's the age-old welfare dependency argument, newly applied to Medicaid courtesy of the Trump administration. It announced in January that it would allow states to impose a work rule for Medicaid recipients deemed able to work. Since then, at least 10 Republican-led state governments have either approved work requirements or are seeking to do so.

But Republicans made clear at a State Capitol briefing Monday that a second motive also propels their proposal. The health care burden on the state budget is growing uncomfortably heavy. They say a work rule could lighten that burden by nudging currently unemployed-but-able-bodied Medical Assistance recipients into jobs with benefits, reducing state costs while boosting tax receipts.

They did not own up to the other likely way a work rule would cut state costs: Those who cannot or will not meet the proposed requirement for work or job training would be pushed off of public health insurance rolls.

"We had a $2 billion increase, a 5 percent increase in the biennial budget, just in this one line item. It's going to eat the state budget," House Speaker Kurt Daudt said about Medical Assistance. "We have to change this ... if you care about almost anything else in the state budget."

That's the case that Republicans intend to take to DFL Gov. Mark Dayton if they get this bill to his desk. Dayton indicated Tuesday that he's cool to a work requirement, though "I don't want to rule it out," he said.

Bureaucratic complexity is among the objections raised by a coalition of nearly 50 Minnesota nonprofit organizations called This is Medicaid. The group notes that to the extent the work requirement leaves more people without insurance, hospitals and providers will see an increase in uncompensated care, the cost of which is borne by everyone else.

The coalition says that two-thirds of nondisabled working-age Medical Assistance recipients in this state are already employed. Many of those who are not would appear to qualify for the proposal's exemptions, which include pregnancy, enrollment in job training programs, being over age 60, caregiving for children or someone permanently disabled, and being deemed "physically or mentally unfit for employment."

But as the coalition points out, not all of the conditions that limit employability fall neatly into those categories. Take mental illness. Sue Abderholden of the Minnesota chapter of the National Alliance on Mental Illness said that Medicaid has been "an important safety net to people who go in and out of the workforce due to their mental illness." Enrolling more low-income people in Medicaid, as permitted by the 2010 Affordable Care Act and authorized by Dayton in January 2011, "didn't lead to more people not working. It led to more people obtaining treatment," Abderholden said.