Proposed Medicaid work requirements could end up costing Minnesota

Republican legislators who are proposing work requirements for Minnesota's Medicaid recipients say it would promote personal responsibility and save taxpayer dollars, but doctors and county officials who work in the system predict that people would lose needed health care in exchange for savings that are likely to disappoint.

The state Medicaid program has ballooned to a cost of $5 billion annually. Hennepin County estimates, though, that enforcing a work requirement would require hiring up to 300 additional caseworkers — raising the possibility that bureaucratic costs would erase any savings.

"This isn't fixing the barrier to people getting jobs," said Dr. Nathan Chomilo of Minnesota Doctors for Health Equity. "This is putting red tape around a program that we know helps children and families."

The chief author of the legislation, Sen. Mark Johnson, R-East Grand Forks, said many details of implementing the requirement still need to be developed, but the idea makes sense.

"It is not overburdening the population," said Johnson. "I think it is really a prudent ask of those participating in Medical Assistance if they can help our workforce and participate in our community."

He added: "It is not necessarily going to be a big cost saver for the state, but it is going to start bending that cost curve."

The estimated 125,000 enrollees who would be affected by the law could keep health coverage if they work 80 hours a month or are looking for work, in job training or "engaged in community or public service."

But the law also says affected Medicaid recipients must accept any suitable employment offer.

That concerns Cantare Davunt, who is on Medicaid and has been looking for work. She worries that she would be forced into an unrewarding job.

"Becoming underemployed just to get benefits doesn't provide opportunity or incentive to pursue better careers," said Davunt, 33, of St. Paul.

Like 60 percent of those on Medicaid, she has worked but still qualified for government health care because of low wages. Most recently she has had a series of temporary jobs, but she also spent many years working for a large retailer that did not provide health benefits.

"I have to have medical insurance in order to pay for medications," said Davunt, who was recently diagnosed with an endocrine disorder. If the disease progresses, she might have to take insulin to control her diabetes.

"Does it mean I will have to go on disability because I can't get the care I need because I can't get a job?" she asked.

Work requirements would not be imposed on the disabled or the elderly — who make up about 20 percent of the 1 million people in the state's Medicaid program but account for nearly 60 percent of spending.

Health advocates are concerned that such a law could force many to seek a disability certification because their physical or mental health conditions would make it difficult to hold a job while they are getting treatment.

"We want people to get the treatment that they need to get better so they can go to work," said Sue Abderholden, executive director of the National Alliance on Mental Illness-Minnesota.

The proposed law would exempt those seeking substance abuse treatment but not treatment for mental illness.

The law "would force people to become certified as disabled," said Abderholden. "You don't want to have a 20-year-old say that they are never going to work again."

An analysis by Hennepin County found that of the county's 55,000 Medicaid enrollees who would be affected, about 40 percent had a mental illness diagnosis. Another 34 percent had been in jail or prison, a history that often makes it difficult to get hired.

"This is an approach that is backwards," said Hennepin County Commissioner Peter McLaughlin. "This is not what it takes to save taxpayer dollars."

Rather than "threaten them and force them into half-baked jobs," McLaughlin said, government should be providing targeted programs to help people overcome barriers so they can find employment.

Hennepin Health, an HMO run by the county for Medicaid enrollees, provides employment training and assistance to those with behavioral health problems who are ready to work, under an experiment approved by federal and state government. Not only have some found work, but the county's Medicaid costs go down because people in the program didn't use the health care system as their lives stabilized.

"We need to invest in people succeeding rather than throwing up barriers," said Jennifer DeCubellis, a deputy administrator for health at Hennepin County.

Federal guidelines for Medicaid work requirements specify that states must help enrollees seek employment, but states cannot use Medicaid dollars to pay for the assistance.

"There will be substantial cost to the state and counties to implement work requirements," said Chuck Johnson, deputy commissioner of the Minnesota Department of Human Services, which has not taken a position on the proposed bill.

Johnson, who helped the state implement work requirements for those on welfare cash assistance, said the department is now estimating how much the new proposal would cost the state.

"It is not a simple thing to do effectively and do well," he said.

Mark Johnson, the bill's author, said the state already has many programs in place to assist Medicaid recipients with finding work.

He also said that as now written, the bill could have some unintended consequences, but that he will look at any reasonable suggestion.

"The commissioner of the Department of Human Services has a lot of authority to define and configure who fits into this program and who doesn't," Mark Johnson said. "There is a lot of flexibility there because we were anticipating concerns."

Glenn Howatt • 612-673-7192