On March 1, 2019, New Hampshire restricted its Medicaid eligibility expansion to require adults ages 19 to 64 to work at least 100 hours per month. Beginning in June, those who fail to report sufficient working hours for two or more months will be dropped from the Medicaid rolls. On March 20, a lawsuit, Philbrick v. Azar, was filed in federal district court, challenging the U.S. Department of Health and Human Services’ (HHS) approval of this demonstration project. The case is expected to be heard before the same federal district court judge who previously ruled against HHS when it approved similar work requirements for Kentucky and Arkansas. In that case the court said that approval was given without considering the harm caused when thousands of low-income adults lose their health insurance coverage.
This post analyzes the effects work requirements would have in New Hampshire, based on analysis of similar policies in Arkansas’ Medicaid and the Supplemental Nutrition Assistance Program (SNAP, also known as food stamps). Both programs adopted work requirements for able-bodied adults without dependents. Within six months of implementing work requirements, Arkansas had terminated the Medicaid coverage of more than 18,000 adults. As SNAP work requirements gradually restarted across the country after 2011, more than 500,000 participants lost nutrition benefits.
Our analysis indicates that between 30 percent and 45 percent of the 51,000 low-income adults subject to the work requirements in New Hampshire — between 15,000 and 23,000 individuals — will likely be terminated within one year because they either can’t meet the work requirements or have difficulty completing the necessary paperwork. This will jeopardize their access to health care, as well as reduce revenue for safety-net health care providers.
We have previously estimated that Kentucky’s work requirements could have resulted in 26 percent to 41 percent of the people targeted (i.e., able-bodied adult Medicaid beneficiaries without dependents) to lose Medicaid, based on evidence from SNAP and Arkansas’s early experience with Medicaid. We expect New Hampshire’s losses would be higher because its work requirements are stricter than those planned for Kentucky. New Hampshire will terminate those who work less than 100 hours per month, while Kentucky used an 80-hour limit. New Hampshire adopted policies harsher than those used in Arkansas, which limited the policies to adults up to the age of 49 without children and waited three months prior to termination. In contrast, New Hampshire exempts one parent of a child under age 6 or a disabled child.
New Hampshire has claimed there would be no enrollment losses, stating: “The state estimates that enrollment in Granite Advantage will not change materially over the course of the five-year extension period, with enrollment remaining near current levels.” CMS did not question this claim, despite numerous comments in the public record regarding the potential loss of coverage and harm likely to result.
But evidence of likely harm is readily available. State or federal officials could have simply checked what happened when work requirements were reinstated in SNAP a few years before. In November 2012, New Hampshire estimated that 6,225 adults would need to begin to meet work requirements. By November 2013, data show that overall SNAP participation dropped by 5,480. The new work requirements were likely the primary factor for this loss of enrollment. Between November 2012 and November 2013, New Hampshire’s overall SNAP caseload fell by 4.6 percent, while SNAP caseloads in the other New England states rose 1.8 percent.
The underlying purpose of a Medicaid Section 1115 demonstration is to enable projects that HHS finds are “likely to assist in promoting the objectives” of the Medicaid program. Based on prior experiences in Arkansas and in New Hampshire, there is no credible reason to believe that New Hampshire’s experiment will promote Medicaid’s core objective of insuring those who are eligible. The state supplied no analysis, and in approving New Hampshire’s proposal, HHS disregarded the question of insurance losses. Moreover, as with other approved work demonstrations, HHS has failed to approve a publicly posted evaluation plan, as required under federal regulations. This will impede an objective assessment of the effects of the demonstration project.
A substantial body of rigorous research, including a recent econometric analysis of SNAP work rules, reveals that work requirements fail to produce long-term improvements in income, employment, or health. Instead, work requirements cause thousands to lose benefits, often because of confusion about paperwork requirements, as recently happened in Arkansas. Because Medicaid expansion is largely funded by the federal government, it can also result in a loss of millions of federal dollars to the state.
In encouraging states to submit Section 1115 demonstration projects for work requirements and then rapidly approving submissions from many states, HHS has sought to change Medicaid without legislative consent, and has not considered the consequences.