Mfi Blogimage Sept28

Medicaid work requirements reduce opportunity for Michigan families

In our 2018 state policy agenda, we write that the state needs a strong social safety net in order to promote opportunity for Michigan families. Last week, Michigan’s Senate Republicans took a step towards cutting another large hole in that safety net, diminishing opportunity for Michigan’s working families.

How this bill will fail to promote work

Last Thursday, in a vote that split across party lines, the Michigan Senate voted to institute work requirements for those receiving Medicaid. The motivation behind the bill is the idea that the only way to incentivize people to work is by making the basic necessities of life dependent on work.

It just turns out this theory is wrong. There is no evidence to suggest that a strong social safety net is incompatible with work. Minnesota, which has a far more generous safety net than Michigan, has an employment-to-population ratio (a better measure than the unemployment rate, because it takes into account those people not working who also aren’t looking for work) nearly 10 percentage points higher than Michigan’s (67 percent vs. 58 percent). And the labor force participation rate in Scandinavian countries, who have the strongest social safety nets in the world, continue to eclipse that of the United States.

Indeed, in our state policy agenda, we posit that a strong social safety net will actually increase our work-rate, by helping to eliminate barriers to work for families receiving benefits. In our report we cite a 2014 anti-poverty plan by Paul Ryan in which he advocates for a case-management approach to benefits receipt, where the first priority is not necessarily to get an individual directly into a job, but to deal with obstacles like physical and mental health that may be keeping someone from obtaining sustainable employment in the first place. This type of plan would require Medicaid coverage that is not conditional on work requirements.

It’s also important to note that the vast majority of Medicaid recipients nationally are already working, or have a good reason for not working, like taking care of dependents or going to school. A study done last year by researchers at U of M on Michigan’s Medicaid population found strikingly similar results. That study also found that the vast majority of those out of work, while perhaps not officially classified as disabled, either suffered from a chronic physical or mental illness. Again, Medicaid coverage is needed to remove these impassible barriers people face that prevent them from working, physical and mental health issues chief among them. This is what we mean when we say we need a strong safety net to promote opportunity.

Penalizing working people

In addition to how work requirements would impact those not currently working, there’s a good chance that should this bill become law, a good number of Medicaid recipients who are currently working would lose their coverage. The bill states that recipients will need to work 29 hours per week. But many low-wage jobs have irregular and inconsistent hours, with retail and food service workers often subject to “just-in-time” scheduling that adjusts to customer demand. Add to this that an estimated 94 percent of the job growth in the U.S. between 2005 and 2015 was in contingent or “alternative” work arrangements, which are often temporary, part-time, and lack a consistent schedule. Rather than incentivizing work, the Senate bill could end up stripping health care from working people.

Regardless of where you stand on the health care debate, if your goal is to incentivize work, making health care contingent on finding steady work in an increasingly unstable economy is a terrible way to do it. Instead, we need a strong safety net that reduces barriers to employment, and promotes opportunity. This should be something that both parties can agree on.

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Patrick Cooney

Patrick Cooney is a policy associate for Michigan Future, Inc., a non-partisan, non-profit organization. Michigan Future's mission is to be a source of new ideas on how Michigan can succeed as a world class community in a knowledge-driven economy.

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