Testimony in Opposition to Work Requirement for MaineCare (Proposed 1115 Waiver)

May 25, 2017

The Maine Center for Economic Policy opposes the changes proposed in the waiver because they undermine the basic principles of the Medicaid program, will cause unnecessary hardships to tens of thousands of Mainers, and will hurt Maine’s economy.

Thank you for the opportunity to comment on these proposed changes to the MaineCare program. The Maine Center for Economic Policy opposes the changes proposed in the waiver because they undermine the basic principles of the Medicaid program, will cause unnecessary hardships to tens of thousands of Mainers, and will hurt Maine’s economy.

The proposed waiver request includes drastic and unprecedented changes to the MaineCare program that will impact thousands of Mainers. None of these changes have been approved by the elected representatives of the Maine people at the legislature, yet they threaten to plunge people into poverty and hardship and come at a cost to our economy.

The Center for Medicaid Services lists four criteria for evaluating section 1115 waivers:

  1. increase and strengthen overall coverage of low-income individuals in the state;
  2. increase access to, stabilize, and strengthen providers and provider networks available to serve Medicaid and low-income populations in the state;
  3. improve health outcomes for Medicaid and other low-income populations in the state; or
  4. increase the efficiency and quality of care for Medicaid and other low-income populations through initiatives to transform service delivery networks.[i]

The draft proposal from Maine’s Department of Health and Human Services (DHHS) meets none of these criteria and in fact threatens to weaken care, undermine provider networks, diminish health outcomes, and reduce the efficiency of the MaineCare program. In other words, it’s antithetical to the purpose of the Medicaid program and the spirit of the waiver process.

We estimate that more than 30,000 Mainers with low incomes, and some with chronic conditions, would be subject to the work requirement, premium payments, and asset tests in this proposed waiver.[ii]

The most troubling aspect of the DHHS proposal is that it ignores the substantial body of evidence that having access to health care is essential to work. MaineCare is a support to work, and taking it away will only make it harder for Mainers to retain their jobs or reenter the labor force. For example, a study by Ohio’s Center for Medicaid Services found that, for individuals who were newly-covered by that state’s Medicaid program, more than half (52%) said getting Medicaid coverage made it easier for them to continue working, while three-quarters (75%) said Medicaid helped them find a job.[iii]

Economists and employers generally agree that a lack of workers is an impediment to economic growth in Maine. One solution is to boost labor force participation in the state among people who already live here. The share of Mainers who are working has declined significantly over the past decade and a half, and proposals like these only exacerbate the situation by creating more barriers to labor force participation. If Mainers aged 25-64 were working at the same rate today as they were in the year 2000, we would have 24,000 additional people working.[iv]

The leading cause of non-labor force participation in Maine is illness or disability.[v] Access to health care through MaineCare can be instrumental in helping many of these individuals return to the workforce. A study of individuals with disabilities found that those living in states that expanded Medicaid eligibility were more likely to be working than those in non-expansion states, like Maine.[vi]

The individuals who lose access to the MaineCare program as a result of these changes will have no alternative means of getting affordable health care. Most low-income Mainers, including those who have coverage through MaineCare, work in low-wage service occupations, which rarely offer a health care plan to their workers.[vii] A large number work for themselves, as self-employed contractors, or as the farmers, loggers, and fishermen who epitomize Maine. If these tens of thousands fail to work enough hours in the month, or cannot afford a premium payment, they will have nowhere left to turn except charitable care at hospitals, or foregoing care entirely. Half of Maine’s hospitals already reported an operating loss in 2016,[viii] and they cannot absorb the additional burden of providing more uncompensated care.

Nationally, most non-elderly and non-disabled adult Medicaid recipients work. Nearly 60% are employed in some capacity, and 80% live in a working household.[ix] In Maine, even among those not currently meeting the benchmark of an average of 20 hours of work a week, nearly half have worked in the past year, and two-thirds worked in the past five years.[x]

There are other reasons why non-elderly and non-disabled MaineCare recipients might not be working at the 20-hour standard. For one thing, the work isn’t always available. Maine’s economy, is still smaller, in real terms, than it was in 2006.[xi] Like many low-income Mainers, the people impacted by these changes work intermittently, or seasonally, and often have significant barriers to work. Our analysis shows that of those likely to be subject to the work requirement:

  • The overwhelming majority (85%) have only a high school level of education
  • One in four are between the age of 50 and 64
  • Thousands live in households without a car
  • And even though the waiver exempts parents of young children, nearly one third (29%) of those affected will be parents.[xii]

The assumption that those who don’t qualify as having a disability under MaineCare are “able-bodied” is also flawed. Fewer than half (48%) of non-elderly adults in the MaineCare program who report having a disability actually qualify under the program’s strict disability eligibility requirements.[xiii] There are tens of thousands of MaineCare recipients who will be subject to the new work requirements who report having difficulty walking, seeing, or hearing, have difficulty living independently, or report mental health concerns.[xiv] The proposed work requirements would even apply to those who receive MaineCare coverage for cervical or breast cancer treatment, or because they have an HIV diagnosis.

These are some of the individuals assumed to be “able-bodied” by the department and not deserving enough. Yes, there is a provision for individuals to prove an inability to work due to health reasons, but it requires a doctor’s note from individuals recently disqualified from a health care program—a Catch-22.  

Finally, the department’s rationale for the proposed work requirement relies almost entirely on the results of previous policy changes to Maine’s food stamp program (Supplemental Nutrition Assistance Program, or SNAP). The waiver application cites a report by the governor’s Office of Policy and Management (OPM) to justify these changes,[xv] but this report offers no proof for the claims they cite. In January of 2015, 7,000 low-income Mainers lost access to the food stamp program because they didn’t meet a similar requirement to be engaged in work, education, or community service. The department follows OPM’s lead in stating that the earnings and employment prospects of these Mainers increased in the year following this policy change. But this analysis lacks important context. The earnings and employment of all Mainers increased in the same period:

  • The number of former food stamp recipients with a wage record increased by 25% following the policy change – but over the same period, state unemployment declined by 27%.[xvi]
  • Average quarterly earnings for former food stamp recipients increased by $1,530, but the average quarterly earnings for all Mainers increased by $1,547 over the same period.[xvii]

The OPM study has a number of methodological flaws and fails to meet many of the basic requirements of a scientific study. It’s certainly no basis on which to build further policy changes and reflects a snapshot in time that fails to capture deeper flaws in the current approach of DHHS. It’s like a picture of a happy family posing at the beach just prior to being swept away by a tidal wave about which they had been warned.

For this administration, the warning signs are growing more numerous. Maine’s public health has grown steadily worse. From the eighth healthiest state in 2010, Maine has slipped to 22nd, according to America’s Health Rankings.[xviii] That’s our worst ranking in the 26 years of the program. We all know we have increasing rates of opiate use that have resulted in a death rate of more than one Mainer a day from overdoses. Infant mortality and teen suicide have risen in the last five years. This is a clear result of poor public policy choices by this administration. Forty thousand adults have already been denied access to affordable care through the MaineCare program, and thousands more children have lost coverage along with their parents. This shouldn’t be a contentious point, but if proof were needed, the proof is in. Denying access to health care only diminishes public health, to the detriment of us all.

Implementing these requirements will accomplish none of the goals of set out in the 1115 waiver process. It will create additional layers of bureaucracy at DHHS to implement them and to chase the poorest Mainers over the matter of a handful of dollars each month. Thousands of Mainers will likely lose access to affordable health care, and as a result will find themselves even less able to work, as their physical and mental conditions worsen. Maine’s already poor economy and public health will only diminish. These proposals put ideology over evidence, and prioritize politics over people, and we urge you to reconsider.

End Notes:

[i] US Center for Medicaid Services, “About Section 1115 Demonstrations.” Available at https://www.medicaid.gov/medicaid/section-1115-demo/about-1115/index.html.   

[ii] MECEP analysis of Maine DHHS data – MaineCare caseload for February 2017.  

[iii] Ohio Department of Medicaid, Annual Group VIII Assessment, 2016. Available at http://medicaid.ohio.gov/Portals/0/Resources/Reports/Annual/Group-VIII-Assessment.pdf?ver=2016-12-30-085452-610.  

[iv] MECEP analysis of Maine Department of Labor data   

[v] US Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 2015   

[vi] Jean Hall et al., “Effect of Medicaid Expansion on Workforce Participation for People With Disabilities,” American Journal of Public Health, Feb. 2017. Available at http://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2016.303543?journalCode=ajph&.   

[vii] Rachel Garfield & Robin Rudowitz, “Understanding the Intersection of Medicaid and Work,” Kaiser Family Foundation, Feb. 15, 2017. Available at http://kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work/.   

[viii] Maine Health Data Organization data. 

[ix] Rachel Garfield & Robin Rudowitz, “Understanding the Intersection of Medicaid and Work,” Kaiser Family Foundation, Feb. 15, 2017. Available at http://kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work/.   

[x] MECEP analysis of US Census Bureau, American Community Survey data, 2015 1-year estimates. 

[xi] MECEP analyses of state Gross Domestic Product data from the Federal Reserve Bank of St. Louis. 

[xii] MECEP analysis of US Census Bureau, American Community Survey data, 2015 1-year estimates. 

[xiii] MECEP analysis of US Census Bureau, American Community Survey data, 2015 1-year estimates. 

[xiv] MECEP analysis of US Census Bureau, American Community Survey data, 2015 1-year estimates. 

[xv] Waiver request, p 5. 

[xvi] US Bureau of Labor Statistics, Local Area Unemployment Statistics, average of monthly unemployment for Maine, Q3 2014 comparison with Q4 2015. 

[xvii] US Bureau of Labor Statistics, Quarterly Census of Employment and Wages for Maine, Q3 2014 comparison with Q4 2015. 

[xviii] America’s Health Rankings, 2016 Annual Report: Maine. Available at http://www.americashealthrankings.org/explore/2016-annual-report/state/ME.