A United States single payer health insurance system has moved one step closer to reality with the Trump Administration’s new rules that allow states to implement a work requirement in order to receive no cost Medicaid health insurance. The requirement that an able-bodied Medicaid recipient work part time in order to receive Medicaid health insurance will demonstrate to both employers and the government that a health insurance system operated by the government will work for employees. “Medicaid For All” may replace the single payer slogan of “Medicare For All.”
Work Requirements Look Like Single Payer Health Insurance
In early January 2018 the Centers for Medicare and Medicaid Services (CMS) announced that they would allow states to propose work requirements in order to receive Medicaid health insurance. The Expanded Medicaid under the Affordable Care Act allows adults with a Modified Adjusted Gross Income of under 138% of the federal poverty level ($16,643 annually for one adult) to be enrolled in Medicaid health insurance.
In California, Medicaid is known by the name Medi-Cal. Virtually all of the expanded Medi-Cal recipients are automatically enrolled in a managed care Medi-Cal HMO plan offered through a county non-profit organization or a private health insurance company such as Blue Cross, Health Net, Molina, or United Healthcare. There are generally no monthly premiums or any cost-sharing such as copayment or coinsurance.
CMS noted that they had received proposals from 10 states for some sort of work requirement in order to receive Medicaid. The first state to be approved was Kentucky who will require able-bodied Medicaid beneficiaries to either work or be engaged in volunteer or educational opportunities in order to continue to receive no cost Medicaid.
In general, for small group plans, once an employee starts working between 20 and 30 hours per week, they are entitled to enroll in the employer sponsored health plan. A person working 19 hours per week at $15 per hour would earn $1,140 per week or $13,680 per year. In all likelihood, this person would meet both the work requirement and the income requirement to continue Medicaid health insurance.
Business Would Favor Single Payer
Business has never been thrilled with the expense and bureaucracy of providing health insurance to their employees. The Affordable Care Act even imposed a penalty on applicable large employers if they don’t offer minimum essential coverage and their employees go to a market place exchange and receive the premium tax credits.
In the last several years employers have looked favorably upon employees who are over the age of 65. Why? If the person is over 65 they most likely have government sponsored single payer Medicare coverage. This means the company doesn’t have to spend a minimum $500 per month on medical benefits because the senior employee already has health insurance. This is a huge savings for any business that has an employer sponsored health plan.
Business interests will be closely evaluating the new Medicaid minimum work requirements to get younger workers on payroll without having to provide health insurance. In the above scenario, an employer could hire two part time employees and not be saddled with health insurance costs. Employers may even work with employees to stagger work schedules in order to work more hours on some weeks but still maintain their Medicaid eligibility.
Aside from the CMS rational that the new work requirement is meant to foster Medicaid beneficiary decision making, health, and community engagement, the real goal is to push people off of Medicaid. There will be a decrease in the Medicaid enrollments over time in states where the work requirements are put into place.
Work Requirements Demonstrate Single Payer Will Work
While the federal government and some state are trying to trim Medicaid enrollment, business is looking for ways to get out from under the burden of providing health insurance to employees. There will be success stories with the new work requirement rules. It will demonstrate that the government can help playing a role with the transition from unemployment to full employment with the assistance of Medicaid.
This will raise the inevitable question of, “If Medicaid was good enough for the part-time worker, why isn’t it good enough for the full-time employee?” Business will begin to promote the concept of “Medicaid For All” as a way to get all their employees’ health insurance without the cost to their bottom line. And if there is no penalty for labor to have Medicaid while management has health plans with a variety of doctors, hospitals, and no waiting times to see a specialist, the incentive for “Medicaid For All” will be that much greater.
Individual And Family ACA Health Plans May Collapse
The Medicaid work requirements may be a good demonstration project on government single payer health insurance when the market for individual and family health plans collapses in 2019. The 2017 tax reform legislation set the individual mandate penalty to $0, effectively repealing it. The Trump administration is on course to allow short term medical plans, don’t meet all the benefits and conditions of ACA health plans, be sold for 12 months instead of just 3. Association Health Plans, a form group insurance without all the mandated benefits, also looks to be headed for approved for 2019 enrollments.
Together the repeal of the individual mandate, inexpensive short term medical, and association health plans, could be enough to collapse the market for individual and family health insurance in many states. In other words, the carries such as Blue Cross, Blue Shield, Health Net, Kaiser, etc., will just stop offering the ACA compliant health plans because there will be too few enrollments, and those enrolled will have expensive health challenges. (See: Can Covered California Survive Repeal of Individual Mandate?)
What could be the immediate basket-catch for a broken market place is the expansion of Medicaid to all working adults not eligible Medicare or not offered employer sponsored health plans. In 2017 Nevada tried to open their Medicaid market to any person who wanted to enroll in it and pay the premiums. The monthly premiums or capitation rates paid by states to Medicaid HMO plans can usually be far less than the cost of a private health plan. This is especially true for adults over 40 years old.
Expanded Medi-Cal Working For Millions Of Adults
In California the expansion of Medi-Cal for adults, based solely on their income, is three times greater than the number of people enrolled through Covered California with the tax credits. There is a good mix of healthy young people to older health challenged individuals in the Medi-Cal pool. This helps to keep the rates low. This is also the very problem that private health insurance plans are having; an absence of younger and healthier people in their risk pool. Many of the adults in expanded Medi-Cal do have jobs and income, just not enough to qualify for the Covered California tax credits.
I find it amusing that the strategy to kill off government funded and managed health insurance for people may be the very illustration and demonstration of how single payer can work. The added benefit is a nod to the fact that, if included, volunteer work or family care work is treated as equally valuable as a wage earning job for eligibility for Medicaid. This is an acknowledgement that people volunteering in our communities plays an important role in the maintenance of the community fabric.
Look for proposals to expand Medicaid to working adults as the individual and family market begins to implode and there are no reforms that congress can agree upon to stabilize the market place. Medicaid plans don’t work for many people because of the limited number of doctors and long wait times. But for the vast majority of adults and children in Medicaid health plans they are just happy to have health insurance they rarely use. This will lead employers to push for an expansion of Medicaid and relieve them of the burden and cost of administering health insurance for their employees.