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What you’ll read about: The state legislature is poised to instruct TennCare to negotiate a work requirement — an unprecedented approach to Medicaid eligibility that raises questions about what happens in times of an economic downturn and how to track hours as the number of people in gig-type jobs rises.

Implementing a work requirement in a state with stringent eligibility rules spotlights a central question the U.S. is grappling with: what happens if insurance is tied to employment, but not all employers offer affordable coverage?

The graphic above: TennCare covered 854,666 women in January 2018, compared to 621,708 men. Data from TennCare.

The state legislature is on track to compel TennCare to negotiate with federal officials on implementing a work requirement into eligibility — a groundbreaking action that will put Tennessee’s Medicaid program on an uncharted course and, likely, increase dependence on employers for insurance.

The legislation itself is not a work requirement. It instructs TennCare to negotiate with the U.S. Centers for Medicare and Medicaid Services to design a waiver, or bespoke policy, although there is no precedent for whether CMS (Centers for Medicare and Medicaid Services) would approve a work requirement for a non-Medicaid expansion state.

There’s been a hustle so far this year for some states to get federal approval to require people who can work to be employed to qualify for the program. Three states, including neighbors Arkansas and Kentucky, are already approved.

But what sets Tennessee apart from those states is that they expanded Medicaid — and Tennessee did not.

Five other states, including non-expansion states, have waivers in the federal queue, but federal officials haven’t made a decision about them.

Multiple versions of the legislation cropped up in the state legislature after President Donald Trump’s administration paved the way for work requirements in Medicaid in January — a landmark decision that will rewire the safety net health insurance program in states that opt to implement a requirement.

Legislative spectators expect the bill to be passed.

The implementation of the work requirement is not immediate. It would have to be drafted and negotiated then approved before implementation. TennCare director Dr. Wendy Long told legislators the agency has been watching what happened with other states when asked why it had not already begun to draft a waiver. There’s no certainty TennCare would get approval, but lawmakers want the agency to try since submitting a waiver costs nothing.

A fiscal note to the original legislation, HB 1551 and SB 1728, estimated a range of costs to implement and sustain a work requirement. It was subsequently amended to use federal block grant funding the state receives for another program.

The decision to let states implement work or community involvement requirements in Medicaid is a new approach for the 53-year-old, government-run insurance program. 

TennCare officials will be facing a host of challenging and changing factors when negotiating the work requirement:

• how the amended program will function across economic cycles,
• how the state will structure implementation and ongoing verification processes, and
• how it reflects the variable nature of low-paying jobs.

Both proponents and opponents of the requirement say it will lead to fewer being covered.

Stephanie Whitt, executive vice president of Beacon Impact, said people could come off the rolls because someone got work and is moving out of poverty, or in some cases be kicked off because they don’t meet eligibility.

Michele Johnson, executive director of Tennessee Justice Center, is concerned that the legislation will force people off the roster unnecessarily. Most people her team assists are working or want to work, she said, but have reasons why they can’t.

TennCare covered 1.47 million people in January. The agency estimated 86,439 would be impacted by a requirement for able-bodied adults without a child under age 6 to work. Debate in the legislature has focused on whether there’s a cost to implement a work requirement, how it’s funded, and any potential savings.

Concerns about putting work requirements on a program people use to access care 

An economist in Knoxville is watching to see if it will go the way of another state program that implemented work requirements more than 20 years ago, which will be a guideline for TennCare.

There have been challenges in implementation and getting people prepared to go to work since the temporary assistance for needy families program, or TANF, got a work requirement in 1996, said Don Bruce, an economist with the Boyd Center for Business and Economic Research, who has studied TANF for years.

Sometimes people need work appropriate clothes or additional care, such as optical or dental before getting a job.

Bruce said the debate over work requirements in TennCare “has gotten me a little bit concerned” because the program is fundamentally different from TANF.

It offers health insurance, which people need to get care, rather than supplemental monetary assistance, said Bruce.

There are many jobs that don’t provide health insurance, so funneling more people into work highlights a critical issue that the U.S. hasn’t solved.

And in Tennessee, which didn’t expand Medicaid, there are working, uninsured Tennesseans who don’t have access to employer-sponsored coverage or individually purchased insurance.

“I’m paying a lot of attention to the rationale behind cries for a work requirement for Medicaid,” Bruce said. “When we have a national health care system that hinges on employer-sponsored insurance, we have to answer the question ‘what happens when you don’t have a job that offers insurance?’”

House Speaker Rep. Beth Harwell, R-Nashville, is the sponsor of the bill passed in the House on March 19. At a recent forum for gubernatorial candidates, the governor-hopeful said the proposal is a way to lift more people out of poverty and into self-sufficiency

“Our hope is that they will be able to get into a position where they could get private insurance,” said Whitt.

Beacon Impact, the lobbying affiliate of the nonprofit free-market think tank the Beacon Center, supports work requirements. It still opposes expansion.

Yet employers with fewer than 50 workers don’t have to offer insurance, and some people can’t afford the insurance at a job even if it’s offered. Some of the fastest-growing industries in Nashville, such as the restaurant and hospitality industries, are jobs that generally don’t offer benefits.

Some people could be in a position in choosing between a promotion that pays too much to qualify but doesn’t offer benefits coverage, or staying in a lower-paying position that maintains eligibility for benefits.

That interchange, or what Whitt called a fiscal cliff, is worth studying, she said. She said given the federal guidance and legislative amendment, the requirement would take a similar approach to TANF and count training or education or volunteering as qualifying activities.

Unemployment is hovering around record lows. What happens when it’s not?

Medicaid is a countercyclical program. That means when the economy is strong, such as it is today, there is less demand for services. When the economy is weak, there is more demand, because unemployment is higher.

Work requirements are a new addition to Medicaid programs, so there is no way to know how they would impact care in a sluggish economy or a recession.

The Kentucky waiver has a provision that considers whether areas have access to transportation. But there’s no information about whether provisions would be relaxed if unemployment rose and jobs were harder to find, said MaryBeth Musumeci, associate director at Kaiser Family Foundation’s program on Medicaid and the uninsured.

Even in today’s boom economy, when state unemployment is hovering at record lows, there are 16 economically distressed counties across Tennessee. People in those counties, including Hancock — where the state is partnering with local and federal officials to bring in a call center — find few available jobs or have barriers to getting and keeping employment, such as transportation.

Laura Berlind, executive director of Sycamore Institute, said a slower economy could make it more expensive to provide support services to help people fulfill the work requirement as demand for them increased.

“That’s an open question still. We haven’t seen any of these waivers actually implemented yet,” said Musumeci. “That’s an important question: What will happen in times when the economy goes into a downturn?”

‘You’d have to have a crystal ball’

For many people in service jobs — such as cashiers, hotel clerks, or home health workers — scheduling depends on demand and is out of their control. Tracking other jobs, such as driving for Uber or Lyft, or landscaping, could be hard to verify.

“What’s so interesting to me is I think a lot of people in government thinking about these issues (have a) vision of what a low-income job looks like that is a decade out of date,” said Adam Searing, associate professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.

Companies often use software to predict when they will need staff, so there could be an uneven amount of hours or even a couple of weeks between work if, say, a home health aide’s patient dies.

“If you’re having to meet hourly work requirements, it’s at the whim of the business you’re working for,” said Searing. “It’s not just whether you’re going to get enough hours that week. What about arranging childcare or getting your kid to school and you’re called in to do the night shift? You’d have to have a crystal ball.”

Whitt said the flexibility, such as the existing parameters for TANF, would help people work around variances in shifts because training and volunteerism would count as qualifying work.

Johnson said the legislators instructing TennCare don’t understand how a lot of Tennesseans live.

“Politicians on both sides of the aisle are kind of clueless about what it means to be a Tennessean — a regular Tennessean who has a car that won’t start or a kid who is sick or a snow day, and they can’t take off,” said Johnson.

Bruce said there is pervasive “mythology out there about the welfare queens” taking advantage of the system but that most people who can work are in jobs.

“If you have an education and are not working then, OK let’s go find you a job,” said Bruce. “If you can’t find a job that will hire you — let’s talk about that. If we’re worried about people who aren’t working, then let’s worry about why they aren’t working and try to fix that.”

Federal approval would be the kick-off. TennCare would design the process later

As programs with work requirements have illustrated, the bureaucracy of verification can lead to mess of red tape.

People can be kicked off for a multitude of reasons, such as misdirection or loss of paperwork or confusion about how to navigate the system leading to a lapse in eligibility even though the requirement was fulfilled.

TennCare officials told legislative committees the addition of a work-verification process would require changes to a computer system that is years in development and planned to launch on Jan. 1, 2019.  It currently doesn’t collect the information, nor does it track eligibility on a monthly basis

Right now, people who apply for TennCare use healthcare.gov, the web portal created under the Affordable Care Act to be an insurance marketplace. It’s federally administered and doesn’t have a function to verify work on a monthly basis.

The Kentucky waiver indicates a monthly verification process, but it’s not clear yet whether it will be self-attesting or how it will work, said Musumeci. In Arkansas, there’s an online portal. But as with swaths of Tennessee, access to broadband internet is potentially an issue with that type of verification.

Johnson is concerned TennCare won’t be able to accurately verify people’s work on a rolling basis, given a recent state audit of its re-enrollment practices that flagged serious issues.

“I don’t have any confidence they can do it in a way that is fair and legal,” Johnson said.

A lot of the details of the requirement, such as verification, will be worked out at the operational level and are not part of the waiver approval, said Musumeci.

Bruce said implementation at TennCare could be “a nightmare in short” after studying what happened when frontline Department of Human Services (DHS) staff had to start verification and placement for Families First, the TANF program. The TANF block grant is slated to fund the TennCare work requirement.

DHS now works with third-party employee placement agencies to help get people into jobs. Sometimes it means helping them get optical and dental care in order to do the job, or procuring work-appropriate clothing.

“Is TennCare going to have to do those? You’re talking about a whole infrastructure that doesn’t exist in that agency,” said Bruce. “DHS learned a lot of experiences the hard way.” •