Health Affairs recently published an article that studied whether a link exists between Medicaid expansion and employment status. Despite predictions that new eligibility for public health insurance would lead low-income Americans to work less or not at all, authors Angshuman Gooptu, Asako Moriya, Kosali Simon, and Benjamin Sommers found that expanding Medicaid has had no appreciable effect on employment.
This finding is significant for at least two reasons. First, the oft-stated fear that increased government benefits will negatively impact employment appears to be unfounded. And second, it begs the question, why should employment changes or job reductions have anything to do with health insurance in the first place?
The Myth Of Self-Reliance And Medicaid
Anxieties that government support leads to dependency are nothing new; they are part of our history as a country and can be traced to the Elizabethan Poor Laws. The myth of self-reliance is an integral part of American culture. Historically, it appeared in puritanical tales like Horatio Alger stories and in the yarns surrounding legends like Benjamin Franklin. In politics today, the myth manifests as desire to create work requirements, job training programs, and cost-sharing requirements for people receiving government assistance.
A number of politicians have capitalized on the myth of self-reliance and its doppelganger—the fear of dependency—in the context of Medicaid. Announcing his intent to support Medicaid expansion in South Dakota last month, Governor Dennis Daugaard stated: "It bothers me that some people who work will become more reliant on government. I hate that. I hate dependency."
House Speaker Paul Ryan recently said: "In 1996, we created a work requirement for welfare. But that was just one program. We have to fix all the others now. I'd combine a lot of them and send that money back to the states for better poverty-fighting solutions. Require everyone who can to work."
Similarly, on the campaign trail, Kentucky's new governor, Matt Bevin, promised to require all able-bodied people to get off "the draw." The hidden assumption in this political rhetoric is that having a job is supposed to be a sign of responsibility, of being a good American, and conversely that people who have jobs will not need government assistance.
While the Department of Health and Human Services has rejected work requirements in multiple states' Medicaid waiver applications, proposals for work requirements for newly eligible Medicaid beneficiaries reflect the enduring myth that recipients of government aid are socially undesirable dependents who freeload on productive members of society. However, health insurance coverage has been notoriously difficult to obtain, and American health care has excluded many from consistent access.
For years, those with health insurance—which has been offered as an employment benefit since World War II—could find needed care, but those without health insurance often could not, except in hospital emergency departments. The primary mechanism for obtaining health insurance coverage has been as an employment benefit.
In 1980, approximately 71.4 percent of non-elderly Americans had health insurance coverage as an employment benefit; by 2007, just 61.6 percent had this benefit, and by 2012, just 54.9 percent of Americans had this employment benefit. The others were either covered by public programs such as Medicare or Medicaid, or relied on charity care, or racked up medical debt often leading to personal bankruptcy. (The small number that could afford individual insurance remained at about 6 percent during that time period.)
The decreases in coverage were measurably greater for middle- to low-income workers; for example, those earning more than 400 percent of the federal poverty level (FPL) experienced a 2.8 percent drop in employer-sponsored coverage from 2000 to 2011, but people earning less than 200 percent of the FPL experienced a 10.1 percent drop in employer-sponsored coverage.
Louisiana's new governor, issuing an executive order to implement Medicaid expansion in the state, explicitly recognized these trends and difficulties: "Whereas most of the people affected by Medicaid expansion are gainfully employed, yet have incomes where it is exceedingly difficult to afford health care coverage…."
Trending Toward Universality And A Misguided Step Backwards
In 2010, health care reform began to reverse these trends by facilitating universal health insurance coverage regardless of employment, wealth, parenthood, or other markers of status in society. Although the Affordable Care Act (ACA) encourages employers to continue providing health insurance, the law also recognizes that millions of Americans either are not offered health insurance through their workplace, or they cannot afford offered insurance.
Thus, two key aspects of the ACA, intended to work together, support people excluded from traditional insurance coverage: Medicaid would enroll those individuals who could not afford health insurance but were previously ineligible, while tax subsidies would be available to people earning too much for Medicaid. Millions of people have obtained health insurance under the ACA's design, even though 19 states have not yet expanded Medicaid eligibility. The Medicaid expansion in 2015 covered about 11 million lives, and the health insurance exchanges offered a point of entry for an estimated 10 million lives, at least 86 percent of whom earned little enough to qualify for tax credit subsidies.
Studies show that the vast majority of people enrolled in Medicaid have at least one full-time or part-time working member of their household. More than half of the individuals in the expansion population are working adults who could not afford private health insurance coverage and had been previously ineligible for assistance.
Not surprisingly, over half of the people in the Medicaid gap in non-expansion states are workers, and that number rises to two-thirds when family work status is measured. The expanded Medicaid program provides coverage to millions of Americans who are already working low wage and hourly wage jobs.
Notably, a significant number of Medicaid beneficiaries will move in and out of public insurance, enrolling in private subsidized insurance and becoming eligible again for Medicaid, over the course of any year due to the variable nature of their wages. This phenomenon, called "churn," shows that work is a false indicator of self-reliance unrelated to public or private insurance status.
Churn is estimated to affect 50 percent of the newly insured Medicaid population, and it highlights the illogical line between public and private insurance, with all of the underlying political implications: a person who earns 140 percent of the FPL obtains private insurance on an exchange and receives generous subsidies for insurance premiums and any cost sharing, but a person who earns 138 percent of FPL qualifies for Medicaid and is receiving governmental insurance coverage that often carries a stigma. At least one of these two people will, in a 12-month period, move between Medicaid and subsidized private insurance, or, in non-expansion states, fall into the coverage gap.
The difference is just a few days' pay. In 2015, the FPL was $11,770 in income per year for a single individual, so 138 percent of FPL was $16,242.60. That means $1,353.55 per month, or $338.38 per week, or $67.67 per day in a five-day work week. By comparison, 140 percent of FPL was $16,478 in income, or $1,373.16 per month, or $343.29 per week, or $68.65 per day in a five-day workweek. The difference is only several hundred dollars, the equivalent of a few days of work.
For someone earning 100 percent of FPL, just one day's work is the difference: a person earning the 2015 FPL of $11,770 per year, or $980.33 per month, or $245 per week, or $49.04 per day would lose subsidized coverage by missing just one day of work, given that an individual earning minimum wage would gross $58 in one day. A brief illness or family obligation could easily result in churn.
Going Forward
The fallacy of the statements of politicians like Governors Daugaard and Bevin and House Speaker Ryan is not only that most people eligible for Medicaid expansion are working, but also that almost all Americans rely on the government to pay some part of their health insurance costs. Even those in employer-sponsored insurance receive tax benefits, a form of government subsidy, for buying policies through work.
The dichotomy is not between non-workers receiving government-sponsored health insurance and workers having purely private pay health insurance; it is between visible public insurance, such as Medicare and Medicaid, or hidden private insurance, such as employer-sponsored insurance and the less-hidden private insurance purchased through exchanges.
There is no reason why health insurance coverage—and by consequence health care access—should be linked to employment. As demonstrated by the Health Affairs article, the anxieties surrounding Medicaid expansion and employment are based more in myths about self-reliance and dependency than in realities of the American poor. More importantly, the ACA rejected the past system of exclusion in favor of a principle of universality, the notion that all Americans are entitled to meaningful, affordable health care. Tethering health insurance to employment undermines this norm. In a post-ACA world, whether a person has a job should have no bearing on getting access to needed medical care.
from Health Affairs Blog http://ift.tt/20FwW2L
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