Mississippi’s Medicaid Policy: Is Work Requirement an Alibi for Welfare Growth?

zimmytws / shutterstock.com
zimmytws / shutterstock.com

In a controversial move stirring up debate, the Mississippi House of Representatives recently passed a bill to extend Medicaid under Obamacare. Speaker Jason White emphasized a crucial aspect of gaining Senate support: the inclusion of a work requirement. White asserted, “They want to see a work requirement in the bill, and we’ve included that.”

However, here’s the twist: Mississippi already operates under an implied work requirement due to existing Medicaid policies, and this expansion could potentially undermine that.

A closer look at the current work clause reveals its origins in Section 1401 of Obamacare. Initially, the law mandated that all states provide Medicaid to low-income earners. A subsequent Supreme Court ruling softened this requirement. Most individuals must demonstrate earnings at least at the poverty level to qualify for insurance subsidies, except for legal aliens in a five-year waiting phase for Medicaid eligibility.

Advocacy groups call this the “coverage gap,” a predicament for low-income earners in non-expansion states who cannot access subsidies. According to the Kaiser Family Foundation, many childless adults with incomes below the poverty level have no affordable coverage options, as Obamacare subsidies kick in at the poverty income threshold.

Yet, a practical solution is overlooked: individuals could increase their income to meet the poverty level and qualify for coverage.

The current setup inadvertently encourages employment, with 80.4 percent of those ineligible for subsidies in Mississippi being childless adults. Mississippi’s structure allows individuals to receive subsidized health coverage by maintaining steady work hours.

Following the calculations and wage increases post-COVID, at a $10 hourly wage, one must work approximately 29 hours weekly to reach the poverty line and access subsidies. A $15 hourly rate reduces this to about 20 hours per week.

Without Medicaid expansion, Mississippi has established a clear eligibility formula—work equals coverage. This eliminates the need for a state agency to monitor the work efforts of Medicaid recipients.

However, the proposed Medicaid extension could undermine this implicit work requirement. Despite the House bill’s inclusion of a work stipulation, the Biden administration is likely to reject it.

Furthermore, the bill prepares Mississippi to waive the work requirement if the federal government rejects its request by a specified deadline. This shift could move the state from an earn-your-coverage model to a broader Medicaid expansion without strings attached.

However, Medicaid has also been sparking many debates across the country. After Salvatore LoGrande’s passing, his daughters were shocked when Massachusetts billed them $177,000 for his Medicaid expenses and threatened to seize his home if they didn’t pay promptly. This process, known as estate recovery, is a federal requirement for all states. It targets the assets of deceased individuals who relied on Medicaid in their final years, particularly for long-term care expenses.

While a person’s home is typically exempt from Medicaid qualification, it becomes subject to estate recovery if they were over 55 and utilized Medicaid for long-term care services such as nursing home stays. Critics of this program argue that it only recovers a small fraction of Medicaid’s annual spending on long-term care, around 1%.

Massachusetts isn’t alone in aggressive estate recovery practices. States like New York and Ohio have collected hundreds of millions of dollars through similar processes. However, there are discrepancies in how states handle estate recovery. Some put liens on homes, while others pursue only certain medical expenses.

Individuals like Sandy LoGrande and Imani Mfalme found themselves entangled in legal battles with Medicaid offices after their loved ones passed away. Despite their efforts to care for their family members, they were blindsided by hefty bills and threats to their homes.

Democratic lawmaker Jan Schakowsky has proposed legislation to end the federal mandate requiring states to recover money from estates, calling the program “cruel” and “ineffective.” However, with a divided Congress and opposition from some Republicans, passing such legislation faces significant challenges.

While the goal of expanding Medicaid may be to assist local healthcare providers, it’s crucial to recognize that it also pushes the state towards an expanded welfare paradigm and greater reliance on government assistance.

Ultimately, it seems like Mississippi is at a crossroads between maintaining a system that promotes self-sufficiency through employment and embracing a more expansive welfare state. The decision made will undoubtedly have significant implications for the state’s future.