November 7, 2017

Medicaid Work Requirements, Premiums Would Thwart Access to Care and Increase Health Care Costs in Florida

New report examines the adverse impact that instituting Medicaid premiums and work requirements would have on beneficiaries and providers, along with lessons learned from mandating these requirements in other poverty-reduction programs

LAKE MARY, FL – Efforts by Florida lawmakers in the 2017 legislative session to implement work requirements and premiums for Medicaid beneficiaries would have ultimately increased the rate of uninsured residents, including children, and added new state costs and uncompensated care burdens for providers, private payors and the overall health care system. In a report released today, Medicaid Premiums & Work Requirements: A Prescription for Higher Costs and Lower Health Insurance Coverage, the Florida Policy Institute (FPI) examines misguided federal and state policies regarding these efforts, along with some of the false stereotypes of Medicaid beneficiaries driving these proposals.

“Under the Affordable Care Act, Florida made substantial progress in reducing its rate of uninsured residents. Lawmakers should work to build on this progress,” said Joseph F. Pennisi, executive director of FPI. “Instituting work requirements and premiums would be a step backward.”

“The report confirms what we see around the state every day,” said Scott Darius, executive director of Florida Voices for Health. “Families that rely on Medicaid are typically made up of hard-working individuals still struggling to make ends meet. Medicaid work requirements and premiums only make it more difficult for Floridians to stay healthy and be productive.”

In the report, FPI notes that:

  • Years of experience with the Temporary Assistance for Needy Families (TANF) program, including Florida’s program, demonstrate that work requirements do not result in long-term stable employment for most participants or lift them out of poverty. In 2015, only 12.3 percent of closed TANF cases in Florida in 2015 resulted from employment.
  • Medicaid coverage enables people to work or seek work because they can stay healthy or address health problems, which are often barriers to employment.
  • While the 2017 legislation exempted certain categories of beneficiaries from work requirements, such as people with disabilities, research shows that exemptions are costly to implement and not effective in protecting vulnerable participants.
  • Women, minorities, people with limited education and those with serious health problems are especially at risk of losing coverage due to work requirements. Nationally, almost two-thirds (63 percent) of beneficiaries are women, more than 50 percent are minorities and roughly 30 percent lack a high school diploma. Forty-six percent have serious health problems, but do not receive disability benefits.

Likewise, decades of research show that Medicaid premiums for low-income families are unaffordable, deter enrollment and result in loss of coverage.  For example:

  • In Florida, Medicaid financial eligibility is extremely restrictive; most participants are very low-income and struggle to afford minimal necessities.
  • Florida passed a Medicaid premium requirement in 2012, which was never implemented. One study projected that 800,000 children and their parents would have been dropped from the program because they could not afford a $10 monthly premium.
  • Premiums cause more people to cycle on and off the program. This cycling increases administrative costs and increases the average cost of care because healthier people are less likely to re-enroll after cancellation.
  • Premiums result in more uninsured families, which increases uncompensated care costs. These costs are shifted to state and local government, health care providers and private payors.

Pennisi added, “A healthy workforce is a productive workforce. Asking Florida Medicaid beneficiaries, people who are already struggling to make ends meet, to pay a premium will result in substantial disenrollment from the program. Further, research shows that the majority of beneficiaries are already in working families, and of those not working, nearly two-thirds are either ill or disabled, or taking care of the household or family. The administrative cost of implementing work requirements far outweighs any benefit.”

The Florida Policy Institute is an independent, nonpartisan and nonprofit organization dedicated to promoting widespread prosperity through timely, thoughtful and objective analysis of state policy issues affecting economic opportunity.

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