Flawed Medicaid Idea - Again

Update, 3/13/20: So far, the ruling on this has not come down from the federal administration. Now that there is a pandemic going on, and with luck, maybe the federal powers that be will give up on it. The attempts to do this in several other states have shown that many people simply lose their health coverage.

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Flawed Medicaid idea

ALERT.

9/17/18. Advocates,

Once again, your comments are needed to help stop SD’s proposal to take away Medicaid from parents who don’t report enough work hours or other countable activities.

Why? The comments are to the FEDs this time. They are very important. These are the comments that can more directly influence the folks at CMS (Center for Medicaid Services), who will decide whether SD may institute the new requirements on SD parents with Medicaid. These will also be the comments that the judge would see if there is a court challenge of SD’s plan. (It was such comments that helped a judge to deny KY’s plan. KY is trying again now.)

Scroll near this page's bottom for how to submit comments. If you need help you can always call or email me!

You can read for yourself the waiver request to the feds from SD: https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/sd/sd-career-connector-pa.pdf

Don’t panic when you see it is 253 pages. The pages you need to see are near the beginning of the pdf. These are:

3-12 description of the program

13 list of the 4 waivers that SD seeks, ie. exemptions from current law

15-27 the state’s responses to our comments last May-June

28-31 how SD plans to evaluate the program

32-34 about the SD’s estimate of Medicaid costs

38-45 the program summary from last May

47-253 many of the comments that were submitted last May-June

48-52 our letter with our 106 signers

53-55 my supplemental comments to that letter

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Please write about what concerns you. If you know individuals or situations where people will likely lose Medicaid, it is important to tell about that. You would not need to give names.

Another page on this website called "References on Medicaid proposal" has articles, studies, etc. Some people like to reference sources like these in their comments. Some will simply like to read the comments from others there.

Below are some thoughts from Bread for the World-SD on the proposal as it is presented to the federal agency (CMS) and on the state’s responses to our previous comments.

Notes on SD’s plan to take away Medicaid if parents do not report enough approved hours:

In general, South Dakota has written a waiver request that tries to emphasize health and job training, as they should. However, despite the state's helpful tweaking since the earlier version, the proposal still would threaten the health of many participants and is counter to the core purpose of Medicaid, which is to ensure that low-income people have the healthcare they need.

A better way exists: The same health services, education opportunities, and work supports should be offered to low-income parents, with no threat of losing Medicaid. The state does not need any federal approval (“waiver”) to do that. The reason for the waiver is to terminate Medicaid coverage. There’s no way terminating coverage can promote coverage.

Who’s affected?

To meet the requirements of a1996 law (described below), South Dakota set up the Low Income Families (LIF) program. It provides Medicaid for parents with children in the home and income less than about half the poverty line. This is the only group targeted for the new requirements. South Dakota would exempt all its other Medicaid categories: the elderly, children, and people with disabilities.

We appreciate some helpful changes.

In the state's responses to the public comments in May-June, the state heeded some concerns and made some adjustments. This is appreciated.

The state agreed to exempt grandmothers and other nonparent relatives who are caring for the children. Unfortunately, the plan is not consistent - some adjustments are reflected in the program description, but some not, such as “parent and other caretaker relatives” mentioned on page 5 of the pdf, page 3 of the plan. This is confusing for patients and advocates.

One concern was answered with a promise to provide “transitional copayment assistance” to mitigate the “child care assistance cliff”. (response #8) As a reminder the childcare assistance cliff is when “an increase in pay triggers an increase in the amount parents must pay for childcare. For example, a mother of two earning $1992 a month, a pay increase of $86 will make her childcare assistance co-pay go up $86 also. Why try to earn more?

These changes are improvements to the proposal. However, sufficient reasons remain for the proposal to be denied.

Here’s why CMS should deny South Dakota’s waiver request

Parents will lose health coverage

A. 15% of the participants are expected to lose Medicaid, undermining the health promise of Medicaid and its core purpose.

The state admits an estimated 15% of the participants will lose coverage. (state response #31). This or any other loss of coverage is contrary to the core purpose of Medicaid to furnish medical assistance to people in need. South Dakota’s proposal should be denied for this reason.

It is fine to offer encouragement and support to help parents improve their well being. But taking away their health coverage is not acceptable.

B. The plan creates a “Catch 22” situation, that will leave people uninsured.

Medicaid’s proposed work requirements will harm families by forcing parents out of health coverage. Once income exceeds South Dakota's very low income limits, transitional coverage* is time-limited. Then, if your job doesn’t have health benefits or if the income isn’t enough to qualify you to buy insurance on healthcare.gov. you find your self without any coverage at all and no way to get it.

The Center on Budget and Policy Priorities released a report this year on this. “Many parents who meet work requirements, as well as those who do not, would be at risk of losing coverage.” https://www.cbpp.org/research/health/non-expansion-states-cant-fix-catch-22-in-their-proposals-to-take-medicaid-coverage

In short: This proposal targets parents who live in deep poverty. It would create a catch-22 situation where hundreds of parents – mostly mothers – would lose health coverage if they don’t get jobs AND if they do. South Dakota’s failure to expand Medicaid to cover low-wage workers turns the proposed “work requirement” into a work penalty.

* Transitional Medicaid lasts one year, then “premium assistance” for up to one year. See the next section, on premium assistance.

C. The proposal’s “Premium assistance” would leave people uninsured.

The proposal includes up to one year of assistance to buy full-price health insurance, if Medicaid is cut off and other options are unavailable. But parents in this situation have income less than 100% of poverty level. Even with premium assistance (only about $410/mo), it would be impossible to pay for insurance plus deductibles plus co-pays for almost any healthcare procedure.

Thus, even if people are able to use the assistance to find a policy they can afford, they will not be able actually to use it. So, what good is it?

D. The red tape will cause people to lose coverage.

Studies show that documenting work-related activities makes it harder for everyone, especially people with physical disabilities or mental health needs, to stay covered, even if they are already working or if they qualify for exemptions. This happens even when participants don't have the added complication of being parents like SD's participants would be - probably mostly single parents.

E. The program’s lack of incentive will result in parents having no coverage.

There is a troubling lack of incentive to keep this group of adults engaged. National efforts to get young adults covered have noted the difficulty of inspiring 18-to-34-year-olds to sign up, even when subsidies are available and no work is required.

Although some may be encouraged by inspirational caseworkers, others with no imminent health issues will simply drop out. This is dangerous, because parents need coverage. It is precarious for children when their parents’ health is at risk by having no regular health coverage.

F. The nature of low-wage work will cause some parents to lose coverage.

Parents in the program who are already employed have jobs with low wages or few hours or both. This job instability threatens Medicaid coverage for them. Inconsistent job hours are typical, meaning some parents will have periods when they’re out of work or have too few hours.

Thus, work requirements would likely do little to reduce poverty and would instead put many low-income employed parents at risk of losing benefits.

G. Subjectivity. Too much caseworker discretion will cause some to lose coverage.

It is a serious issue that many of the state’s responses say parents making a “good faith effort” would not lose their Medicaid. This relies on subjectivity of the DSS and DLR caseworkers, who apparently also determine what are the “milestones,” and what are “'good cause’ exemptions,” and what would constitute a “corrective action” plan. Studies show caseworker discretion results in racial disparities, making minority groups more likely to lose coverage. Flexibility is helpful at times, but the program is flawed by having so many undefined terms and potential variability from caseworker to caseworker.

It is doubtful that the goals of the program can be met.

H. Lack of any additional budget for the program really is a serious flaw.

Our previous comments showed a strong concern that No staff hours or FTEs were included in the state budget for this program's intense management. Nevertheless, the state continues to say it will simply use existing staff and resources (response #13).

Which is it? If the program is intensive, as it purports to be, then the case management will be intensive, needing more staff, more funding to run volunteer activities, more funds for training. Not requesting funds for this program shows a lack of a good faith effort by the state to ensure that this program will succeed.

On the other hand, if the program is to run only on current budget and staff, then prospects for success are dim. The track record of current work programs (SNAP and TANF), administered by the same staff, show few participants moving into family-sustaining jobs.

I. The track record of other SD work programs should give pause.

South Dakota’s current work programs (for SNAP and TANF) show little success in preparing participants for and placing them in good paying jobs. The similar work program in Arkansas shows thousands of people losing Medicaid. If the current work programs aren’t doing any better than the record shows, a new program that is so similar will also result in many parents losing Medicaid.

J. If resources are available, why not now? How much is new?

If South Dakota’s Dept of Social Services and Dept of Labor have more resources to offer these parents, as the proposal suggests they do, then why aren’t they doing so already - without threatening to take away parents' Medicaid? Already parents could have caseworkers at DSS and DLR develop an “employment and training plan” for them. The reasonable, helpful things people can do in order to better their situation should be available and encouraged without threat of losing Medicaid.

There is no need for a federal waiver to provide this help now. The only reason for the waiver is to get federal permission to cut people off their Medicaid.

The proposal starts with a voluntary version. It should stay that way. It has the intense case management and work supports but would not take away Medicaid. Really, that’s all the state needs. If it succeeds in getting people into good jobs with insurance (a job benefit or through the marketplace), that would show there is no need to take away Medicaid. If it doesn’t, that would show this approach won't meet the goal of the program, so it should not get the waiver. (Even if there is low participation, that could be because the services offered aren't so useful or well-funded enough. Recall that SD didn't added additional funding to administer the program. Or, it could be the result of the good jobs not being so available.) The upshot is: There is no need for the waiver either way. The only thing that the waiver does is create the opportunity for people to lose coverage.

a. Childcare.

The state’s childcare officials now say they hope to use a small pot of new federal money for this program, if federal rules will allow this and after rule-change procedures, likely in November. Thus, any approval from CMS should not be granted before November, if at all. The official states that there are also other childcare needs for that new money.

The state claims (#2) parents in the program would meet the income requirements for childcare assistance. However, they might not, especially part-time student parents and parents whose “milestones” leave them short of 80 hours.

b. Transportation. The state’s response (#14) to concerns about transportation relies on assistance that is currently available, although our inquiry into the possibility found that the pool of such funding is already being fully utilized. Many parents with such low incomes would need help with transportation.

K. All too often the state answers our concerns with only good intentions, rather than addressing the concern.

Examples, to our concerns about costs of uncompensated care (#9), the impact of a criminal record (#15), people losing coverage (#23), people ages 50-60 (#27), outlook for rural areas (#28), availability of jobs with living wage and benefits (#30), staff abilities (#39).

L. Realities of jobs, 4th lowest average hourly wage

With pay so low here, a real concern is whether enough high-paying jobs with benefits would actually be available for this group. What portion of this group of generally low-skilled parents can be expected to finally land good paying jobs with benefits, even after many years of intense case management and training?

More reasons to deny the waiver request

M. Children would be harmed too.

With this proposal, South Dakota is turning its back on its long support for children’s health. When parents lack insurance, children are less likely to have regular doctor visits, more likely to become uninsured themselves, and more likely to experience financial insecurity.

N. The proposal is not a fair “demonstration”

The state chose Minnehaha and Pennington counties precisely because that’s where jobs are more available than in rural areas. This does not fit the criteria for a “demonstration” program, and thus, the proposal should be denied.

O. Medicaid coverage for these particular parents is protected by 1996 law.

The participants in South Dakota would be the very parents who were protected from losing Medicaid by the 1996 welfare reform law. These are the most destitute families in the state, with income below about half the poverty line.

The 1996 law (PRWORA) specified that, even though there would be many cuts coming with the change from AFDC to TANF, those parents who would be receiving Medicaid eligibility under the old law must be allowed to keep that eligibility. South Dakota’s waiver request breaks that promise and should be rejected.

Congress in 1996 recognized the importance to children of the health of their parents. One disaster to a parent’s health would spell disaster to the lives of the children.

P. Parents of children under age 6 are exempted in other state’s plan, but not here.

No state that now has Medicaid work requirements imposes this requirement on single parents of children as young as those in SD’s proposal. The other states exempt parents caring for children younger than 6. Yet a large portion, approximately half, of those targeted in South Dakota are parents caring for children age 12 months to 6 years. Of course, any low-income parents should be offered the work supports, without any form of coercion.

Q. Disproportionate Harm to Minorities; Treaty rights

The estimate is that 30% of the participants would be Native Americans (the principle minority group in these proposal’s area of the state) and the impact would be “devastating.” [from Great Plains Tribal Chairmen’s Heath Board letter to the state ] That in itself means Native Americans would be disproportionately impacted by South Dakota’s proposal and more likely to lose coverage than whites.

The state responded to the concern about tribal members’ treaty rights (response #4): “The proposed program is a pilot program and will only operate in Minnehaha and Pennington County, which do not include Indian reservations. These counties were chosen due to the availability of jobs and employment and training services.” This answer might fool someone who does not know that thousands of Native Americans live in Sioux Falls and Rapid City, not on the reservations, but it does not address the concern about the treaty rights or the disproportionate harm to minorities.

R. The public will pick up tab for those without coverage.

When parents lose coverage, costs for those individuals’ catastrophic care, that could possibly have been prevented, go to ordinary citizens. Wouldn’t it be better for that person’s health condition to be found, treated and monitored before it takes the person’s health and maybe her life?

Without health coverage, the healthcare people get is only acute care, not preventive care, and not chronic disease management. It is not enough to say people will get taken care of in the Emergency Room. Regular health coverage can help keep people out of the ER.

S. There is a fundamental un-American inequity in the work requirement.

Wealthy people can buy health insurance whether he/she does any work hours or not. Similarly, those of us with insurance through a spouse’s employment have no work requirement. Yet South Dakota now proposes that the state’s most destitute parents must report approved activities in order to keep their basic health coverage and the human dignity that goes with it.

T. The proposal is an experiment on the poor.

Without clear evidence that the work requirement improves health or financial stability, this plan is an experiment on the poor, except for one thing: It is supposed to be an experiment, but we know what the result will be. Some people will get into jobs that don't have health benefits. Some will get into jobs that don't pay enough to live on. Some people will lose health coverage (The state estimated 15% of the parents.), leaving them and their families worse off.

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It is time to submit our comments to the feds.

Why? The comments are to the FEDs this time, not to the state. They are very important. These are the comments that can more directly influence the folks at CMS (Center for Medicaid Services), who will decide whether SD may institute the new requirements on SD parents with Medicaid. These will also be the comments that the judge would see if there is a court challenge of SD’s plan. (It was such comments that helped a judge to deny Kentucky’s plan. Kentucky’s is trying again now.)

How to submit comments by Wed. Sept.26, 10pm central time, 9pm Mt time:

1. You can write comments into the box on this link and/or use the attachment option on there (no need to “register” or “log in”) :

https://public.medicaid.gov/connect.ti/public.comments/answerQuestionnaire?qid=1898179

2. If you want, you may send them to breadsd@gmail.com, and I can submit them for you. Feel free to email me or call.

Public opposition to this plan must be loud, clear and undeniable!

Thanks for help to preserve Medicaid for the lowest-income parents in South Dakota.

Cathy B