The Trump administration last week announced a major change in Medicaid, allowing states to impose work requirements on able-bodied adults as a condition of enrollment in the health care program.
Ten states had expressed interest in running demonstration programs mandating the work requirements or similar "community engagement activities" for Medicaid recipients.
Oregon is not among those states, and this is an experiment we'll be happy to watch from afar. For starters, we're not sure that it will have the intended effect, in part because the requirements likely will apply only to a small percentage of Medicaid recipients.
Besides, if the federal government really was interested in getting poor people to work, it has a much easier option — albeit one that was ignored in the recent tax-reform bill. We'll get back to that in a bit.
The administration's legal rationale for giving the green light to the state experiments is the idea that the work requirements will make people healthier; improved health is the stated purpose of the Medicaid law. So the argument here is that "productive work and community engagement may improve health outcomes," in the words of Brian Neale, the director of the federal Medicaid office.
That's generally true, as far as it goes; generations of public health research have consistently shown a correlation between higher incomes and better health, as you might imagine. But it is not clear how much work or additional income by itself can improve health.
Besides, research into the Medicaid population suggests that most recipients either already work or will be covered under one of the allowed exceptions: For example, Trump administration officials said, states would have to make "reasonable modifications" of their work requirements for people battling opioid abuse or other drug addictions. In addition, the administration said, Medicaid officials cannot impose work requirements on pregnant women, elderly beneficiaries, children or people who cannot work because of disabilities.
So it's unclear exactly what impact this will have on Medicaid populations. It will be interesting to watch this experiment play out in the states that elect to take the leap.
In the meantime, we may be giving short shrift to a program that has a proven track record in terms of pulling people out of poverty and putting them back to work: the Earned Income Tax Credit.
A professor at Oregon State University recently touted the Earned Income Tax Credit as a program that offers real benefits to poor families, but noted that the program is underused. A recent article in The Atlantic underlined the program's effectiveness: In 2015, the credit supported about 28 million families with an average credit of $2,440, and helped elevate 3.3 million children over the poverty line.
The tax credit isn't a handout: A single mother needs to make income on her own in order to qualify for it.
And the credit works. A recent study suggested that a $1,000 increase in the Earned Income Tax Credit led to an increase in employment and a reduction in the share of families in poverty. A new study from the University of California, Irvine, concluded that the credit also improves the lifetime earning potential of single mothers.
In other words, a bump in the Earned Income Tax Credit likely would improve the financial status of working parents. (And such a boost, in theory, would improve the health of those parents and their kids.)
Yet the Earned Income Tax Credit didn't get much traction during the recent debate over tax reform. It's a shame: Over the years, the credit has enjoyed bipartisan support and, in fact, was expanded by none other than Ronald Reagan.
It may well be that these state Medicaid experiments will result in better health outcomes. But the administration and Congress are ignoring a proven tool that could net the same result. (mm)