McCarthy’s Medicaid reforms could doom millions

Category: Listening Sessions, Personal Stories, The Safety Net, Updates

May 18th, 2023

Devon Gray is the President of EPIC. He previously he served as a director at Evergreen Strategy Group and as a special adviser in Gov. Gavin Newsom’s administration.  This article originally appeared on The Hill.

Speaker Kevin McCarthy’s recent proposal to strip Medicaid coverage away from people who do not meet new work-reporting requirements puts more than 10 million people in Medicaid expansion states at high risk of losing coverage. The proposal, which House Republicans passed last week, is extreme and undoubtedly harmful, yet entirely in sync with entrenched attitudes long held by policymakers about people living in poverty who seek government assistance.

For decades, if not centuries, harmful narratives about why poverty persists have bled into conventional wisdom held by elected officials and many of their constituents. The story we have been told frames poverty as an individual failing — that people are poor because they choose to be, or because they are lazy, or because they are fundamentally untrustworthy — despite clear evidence that poverty is primarily driven by systemic policy failures.

As the leader of a statewide anti-poverty organization in California, the state with the highest poverty rate when accounting for cost of living, I’ve seen how these harmful narratives keep people in poverty. Nowhere has this been more obvious than with the types of work requirements that Speaker McCarthy is advancing. This step, fueled by the myths about the people it will impact, will create additional barriers to access, erode trust in government and enable worse health outcomes for those who need help the most.

At their core, work requirements are designed to create barriers to access for those seeking assistance. And these barriers are an intended consequence stemming from a presumption that benefits seekers are potential fraudsters or leeches to the system.

Take, for example, the federal Temporary Aid for Needy Families (TANF) program. A product of the welfare reform push of the 1990s, TANF replaced direct cash aid to instead give states block grants with the requirement that a share of their work-eligible participants are indeed working. This led states to impose onerous requirements and forms for applicants to repeatedly demonstrate that they are seeking employment. Unsurprisingly, the national caseload of needy families has declined by 76 percent since TANF’s inception — and not because these families are no longer in need. Rather, millions of families have gone without government aid for which they would otherwise qualify because of these barriers.

This presumption of fraud that has dictated the gatekeeping of benefits programs is not only unfounded and responsible for sinking people into even deeper poverty, it ultimately damages the relationship between benefits recipients and the government. Our organization has heard time and again from Californians about their challenges accessing the benefits system and how being forced to overcome this presumption of fraud impacts their sense of dignity and worthiness. Trust in government is key for a number of reasons, but a lack thereof only serves to discourage people living in poverty from seeking the benefits to which they are entitled — ultimately decreasing the odds that they will achieve financial security.

Finally, and perhaps most obvious, requiring Medicaid recipients to comply with work requirements will potentially leave millions of Americans without the health care coverage they rely on. This isn’t just speculation. In Arkansas, the only state thus far to have removed Medicaid coverage for those not adhering to work-reporting requirements (before a federal court ended the program), a quarter of those subject to the rule lost coverage, despite these requirements having no impact on employment outcomes. Beyond the clear economic harm one experiences by losing coverage, this proposal also risks an increase in health care costs being passed elsewhere — namely to taxpayers and health providers.

McCarthy’s proposal is nothing novel or out of step with attitudes that have dictated welfare policymaking for decades. Former President Clinton, when instituting welfare reform in 1996, promised to “transform a broken system that traps too many people in a cycle of dependence.” Ironically, the very features of this type of reform have done more to trap people in poverty than they have ever done to help people escape it.

So long as policy is crafted with tired notions and stereotypes, we will continue to see proposals like this one. But if we embrace a more accurate narrative around poverty, and understand that most people struggling have been set up to fail, we can devise programs that actually work.