Michigan Medicaid Work Requirement Would Discriminate Against Communities of Color

Over the last year, conservative legislators and the Trump Administration promoted work requirements across a wide range of public benefit programs. Their push for “welfare reform,” or, as administration officials sometimes refer to it, “Welfare Reform 2.0,” comes on the heels of a tax bill that offers massive tax cuts for the wealthiest Americans and corporations, but does little for everyone else.

Last month, President Trump signed an executive order directing all federal agencies to consider ways to strengthen existing work requirements and impose new ones. New or stronger work requirements have since been proposed for housing assistance, nutrition assistance and Medicaid health coverage.

Decades of evidence from the United States’ last experiment with “welfare reform” show why work requirements don’t work. Most notably, they do not accomplish their stated goal of helping people enter and maintain employment and increase earnings in the long run. Instead families who fail to meet requirements lose assistance – whether it is because they cannot find work, their jobs do not offer enough hours, they have health problems or caregiving responsibilities that interfere with work or they cannot keep up with the paperwork. Families at the lower end of the income distribution are hurt the most and extreme poverty has doubled over the last 20 years.

But there’s another problem with work requirements: they may be enforced in racially discriminatory ways and ultimately increase racial disparities. Evidence from 10 states suggests that African American parents are more likely to be penalized for failing to comply with work requirements than other parents receiving cash assistance through Temporary Assistance for Needy Families (TANF). The potential for work requirements to increase racial disparities is brought into sharp relief by recent developments in Michigan.

The Michigan legislature is currently considering a bill that would impose the harshest work requirements on Medicaid recipients yet. Currently 2.3 million Michiganders receive their health insurance through Medicaid – 1.6 million through traditional Medicaid and over 600,000 through Medicaid expansion, which covers everyone earning less than 138 percent of the federal poverty line. Despite the fact that nationally, the vast majority of adults receiving Medicaid live in working families and in Michigan the majority of people who benefited from Medicaid expansion either work or are unable to work, Michigan legislators are jumping on the bandwagon and proposing work requirements.

Michigan Senate Bill 897, which passed the Michigan Senate on April 19 and is currently before the House, imposes a 29 hour per-week work requirement – significantly higher than the approximately 20 hour requirement proposed by the three states that have received approval from the Trump Administration to institute Medicaid work requirements to date. If passed, this means that a single mother in Michigan who averages 28 hours of work per week in a given month could lose her health insurance. The draconian work requirement has attracted criticism from across the political spectrum, including from the state’s Republican Governor Rick Snyder.

Equally disturbing, however, is the revelation that the harshest features of the work requirement would be applied disproportionately to people of color. This is because the bill contains an out. Most Michiganders can only meet the work requirement if they work or are in education or training, but people living in counties with high unemployment (over 8.5 percent) can meet it by “actively seeking work.” While racially neutral on its face, in practice the provision means that people living in rural, largely white, counties with high unemployment will have an easier time meeting the requirement, while people living in majority African American cities like Detroit and Flint that have high unemployment but sit in counties where the unemployment rate falls below the 8.5 percent threshold will have a much tougher time meeting the requirement. The same holds true for Arab Americans and Muslims living in cities like Dearborn and Hamtramck.

These sorts of inequities are endemic to work requirements, and exacerbated by the Trump Administration’s decision to encourage local variation in how work requirements are applied. As George Washington University professor Sara Rosenbaum, an expert on health law and policy, has noted, the permission of local variation allows for “enormous discrimination, really racial redlining.” This is because rural areas, which often have both larger white populations and higher unemployment, are more likely to benefit from any geographic exemptions to work requirements. Urban areas, where many people of color live, will generally be subject to work requirements, despite the fact that communities of color often have high unemployment rates even within cities where unemployment rates may be relatively low.

The Michigan legislation shows how this racial redlining could work in practice. In states like Kentucky that have already received approval to institute Medicaid work requirements, similar racial redlining could go into effect as early as this summer.

Instead of imposing work requirements that do not help people find and keep good jobs, legislators should expand access to programs that do – including child care assistance, education and training, and, indeed, health care.

Elisa Minoff is a policy analyst at CSSP.