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A Medicaid Plan that Works for Georgia

“Work requirements” are back in the news, after a federal judge ruled in favor of Georgia’s Medicaid “waiver.” It’s worth exploring what this means – and what it doesn’t.

You may recall this discussion from years past. Rather than expanding Medicaid as envisioned by Obamacare, Gov. Brian Kemp sought and received federal permission for a more limited expansion, including a work requirement. But within days of Joe Biden entering the White House, the federal government signaled it would rescind that approval, which it did late last year.

First things first: “work requirements” is a misnomer. In fact, the Georgia Pathways program offers several ways to meet the 80-hours-per-month qualification. Those include a job, job training, community service and some types of education.

But to the extent “work requirements” are fulfilled by actual work, they’re a proven way to help Americans better themselves financially. We can see this from the successful welfare reforms of the 1990s.

A 2016 study of the effects of the reforms by the Manhattan Institute found child poverty, for example, fell from 29% in 1993 – exactly where it stood back in 1967 – to 18% in 2000 and 17% in 2009. Even after the Great Recession, it was significantly lower than pre-reform, at 19% in 2012.

What changed? Single mothers joined the workforce. Before, they faced a choice between working and receiving benefits – a choice that skewed toward welfare because of the relatively high wages one would have to earn to replace those benefits. With greater latitude to work, single mothers began working at much higher rates: a 15-percentage-point increase between 1996 and 1999, compared with a 10-point increase between 1980 and 1996. The share of single mothers on welfare fell from 50% in 1996 to 17% in 2008.

How does that apply to Medicaid? It largely hasn’t. Courts ruled that adding work requirements for existing recipients in Arkansas and Kentucky was unlawful because it would cost some people their coverage. Opponents of Georgia’s waiver pointed to those rulings as a reason Kemp was wasting his time.

But Kemp’s program, called Georgia Pathways, essentially reverse-engineered the Arkansas and Kentucky rulings. Rather than adding work requirements for current beneficiaries, Georgia uses “qualifying activities” to determine eligibility for the new program. People can’t lose coverage they never had.

Thus, Georgia Pathways can only increase coverage. That was central to the Aug. 19 decision by U.S. District Judge Lisa Godbey Wood, which set aside the Biden administration’s rescission of Georgia’s waiver.

Pending an appeal by CMS, we may finally get to see how work requirements fit with Medicaid. We can expect good things.

First and foremost, we can expect better health outcomes for recipients – even if federal judges have said health outcomes aren’t a priority for Medicaid waivers, because coverage is the program’s central objective. Why better outcomes? Research indicates employed people tend to remain healthier. Even if that isn’t a primary objective of Medicaid, it would be a worthy result.

Georgia Pathways also prioritizes private coverage for workers whose employers offer health insurance. That’s beneficial for them in two key ways. First, private insurance is much more widely accepted by providers than traditional Medicaid, so these workers are far more likely to gain access to care.

Then there’s continuity of coverage. The income limit for Georgia Pathways is 100% of the federal poverty line, or $13,590 for a single adult this year. A part-time worker earning $13.50 per hour would barely qualify. But if he got an hourly raise of even 10 cents, he might lose it.

With traditional Medicaid, that would mean losing his specific plan, with its specific network of doctors. But with Georgia Pathways, he would already be on his employer’s plan. Although he would have to pay more in premiums, he could stay on the same plan and keep the same doctors.

All of this is more complicated than our bumper-sticker politics prefers. But it’s clear that with this ruling, Georgians may finally get a plan that works