The Impact of Alabama’s Proposed Medicaid Work Requirement on Low-Income Families with Children Key Findings What is Alabama proposing to do? 1. Alabama’s proposed work Alabama is seeking federal permission through a Section 1115 Medicaid requirement and subsequent demonstration waiver to require parents and caregivers who rely on Medicaid coverage losses would to work 20 to 35 hours a week, prove they are looking or training for a job or disproportionately affect mothers, do community service before receiving Medicaid. This proposal targets the African Americans and families very poorest and most vulnerable families with children in Alabama—many of living in rural communities. whom will lose their health coverage. Many of these women will likely If approved, according to the state’s own projections, the work requirement become uninsured as employer- would result in approximately 14,700 of Alabama’s poorest residents losing their sponsored insurance for low- Medicaid coverage by the fifth year of the plan. This number underestimates the wage workers is sparse. potential impact of the proposal for two reasons. First, the number of parents 2. The proposal creates a Catch-22: who would “churn” on and off Medicaid and face periods without insurance Any parent working the 20 to is likely much higher. And second, some children would likely lose coverage 35 hours required would make alongside their parents, yet the state does not account for this. too much money to qualify for Medicaid—but likely not enough Alabama is not the first state to seek a work requirement, but it is one of the to afford private insurance. The first to do so without accepting the Medicaid expansion provided under the state estimates that just under Affordable Care Act. That expansion allows adults with incomes slightly above 15,000 parents would be removed the poverty line (138 percent of the federal poverty level) to receive Medicaid. from Medicaid by the fifth year In Alabama, only the poorest parents and caregivers, those making 18 percent of the proposal. This number is of the poverty level or less—$3,740 a year for a family of three or about $312 likely too low. a month—now qualify. That is the strictest eligibility requirement in the nation 3. When their parents lose health (along with Texas). Because Alabama has not expanded Medicaid, the work coverage, children suffer. The requirement would apply only to these extremely poor parents. families face increased debt, and The proposal creates more red-tape and barriers to health coverage without children are less likely to visit the any guarantee of new resources to help families overcome barriers to doctor regularly and more likely employment such as job training, transportation or childcare assistance so to become uninsured themselves. that very low-income mothers can fulfill their parental responsibilities while Children in these families are meeting the new restrictions on Medicaid coverage. As a recent national study already disproportionately pointed out, most Medicaid enrollees who can work already do. But many will uninsured. lose Medicaid coverage as a result of onerous reporting requirements.1 August 2018 CCF.GEORGETOWN.EDU ALABAMA’S PROPOSED MEDICAID WORK REQUIREMENT 1 Who would be affected? An analysis of parents who rely on Medicaid Adults with Medicaid Coverage in Small Towns and for health coverage in Alabama finds that:2 Rural Areas, by County, 2014-2015 zz At least 85 percent are women; zz 60 percent are not in the workforce, in many cases because they are caring for someone else or have an illness or disability; 24 percent describe themselves as unemployed. The remainder are already reporting some work; zz 58 percent are African American; 40 percent are white; and zz 35 percent are young parents under age 30. Overall, families in Alabama’s rural communities and small towns are more likely to be impacted because Medicaid covers a larger share of them. zz About 14 percent of adults in these communities are covered through Medicaid, Counties at or above national average Counties below national average compared to 11 percent in urban areas. Metropolitan counties (no data) zz Among children, 52 percent in Alabama’s Note: The national weighted average for percent of adults with Medicaid coverage in small towns and rural communities have small towns and rural areas is 16 percent. Source: For information on sources and methodology, see Georgetown University Medicaid coverage, compared to 42 percent in Center for Children and Families and University of North Carolina report, “Medicaid in metropolitan areas.3 Small Towns and Rural American: A Lifeline for Children, Families, and Communities.” The proposal creates a Catch-22 situation, making it impossible for parents to retain their health coverage. The proposal requires the poorest parents to work at least afford one, at least not one that would provide adequate 35 hours a week—or 20 hours a week if they have children coverage for needed health services. under age 6. At Alabama’s minimum wage, working 35 The primary change as a result of the state’s latest version hours a week would amount to an annual income of of the proposal is to offer a limited number of parents $13,195. At 20 hours, it would be $7,540. Both would be who meet the work requirement six months of additional too high to qualify for Medicaid in Alabama. Medicaid. This change does nothing to address the When these parents lose Medicaid, they would likely lose fundamental flaws in the state’s approach, including the health coverage. Less than a quarter of Alabama adults Catch-22 situation. The revision merely postpones the living below the poverty line are covered by employer- inevitable coverage losses for parents and, in fact, is an sponsored insurance.4 Even if parents are eligible for an even harsher approach than what neighboring Mississippi employer-sponsored plan, they likely will not be able to is proposing. 2 ALABAMA’S PROPOSED MEDICAID WORK REQUIREMENT CCF.GEORGETOWN.EDU August 2018 As parents lose health coverage, negative effects for children will follow. zz Alabama’s most fragile families would face more even greater risk should their parent lose coverage. medical debt and possibly even bankruptcy. When a Alabama has been a national leader in reducing the parent loses health coverage, the entire family is put overall uninsured rate for children, but our analysis at greater financial risk. Medicaid improves families’ finds that these children from very low-income economic security and financial well-being.5 households are disproportionately uninsured. zz 6.2 percent of Alabama’s children in these very poor zz A healthier parent is more likely to be a better parent. families affected by the proposal are uninsured, Parents who have access to health care are better able compared to only 2.4 percent of all children in the to actively support and nurture their children’s healthy state.6, 7 Research has shown that when a parent is development. Maternal depression is a good example uninsured a child is much more likely to be uninsured.8 of a treatable condition that Medicaid coverage helps Those with health coverage are more likely to see a to address. doctor regularly when their parents have coverage, too. Alabama’s proposal puts these children at Conclusion Alabama’s five-year Section 1115 demonstration Enacting the proposed work requirement on the application is currently open for public comment at the most vulnerable families in Alabama is unlikely to state level until August 30, 2018. After that, the state will achieve its objectives and will harm the state’s most revise its proposal and submit to the federal government vulnerable women and children—thousands of whom which also must hold a 30-day public comment period. will likely become uninsured. The proposal is likely to It is not clear if the federal government will approve the disproportionately affect African-Americans and families proposal, though recent federal guidance has encouraged living in rural areas. states to establish work requirements in Medicaid. August 2018 CCF.GEORGETOWN.EDU ALABAMA’S PROPOSED MEDICAID WORK REQUIREMENT 3 Endnotes 1 Garfield, Rachel, Robin Rudowitz and MaryBeth Musumeci, “Implications of a Medicaid Work Requirement: National Estimates of This brief was prepared with support from Joan Potential Coverage Losses” (Washington: Kaiser Family Foundation, June 2018), accessed at https://www.kff.org/medicaid/issue-brief/ Alker, Cathy Hope, Phyllis Jordan, Olivia Pham, implications-of- a-medicaid-work-requirement-national-estimates-of- and Karina Wagnerman at the Center for Children potential-coverage-losses/. and Families, and Jim Carnes and Chris Sanders 2 These estimates are based on an analysis of American Community at Arise Citizens’ Policy Project. Design and layout Survey (ACS) data. We use an augmented version of the 2015 and provided by Nancy Magill. 2016 ACS, the Integrated Public Use Microdata Series (IPUMS), prepared by the University of Minnesota Population Center (IPUMS- The Georgetown University Center for Children USA, University of Minnesota, www.ipums.org). We establish and Families (CCF) is an independent, nonpartisan two-year state-level estimates of health coverage and demographic policy and research center founded in 2005 with characteristics for parents. Parents are between 19 and 64 years old, a mission to expand and improve high-quality, have a child who is under 19 years old, are covered through Medicaid, and live in a household with income below 19 percent FPL. Individuals affordable health coverage for America’s children receiving supplementary security income and individuals for whom and families. CCF is based in the McCourt School poverty status could not be determined are excluded. of Public Policy’s Health Policy Institute. 3 J. Hoadley et al., “Medicaid in Small Towns and Rural America: A Arise Citizens’ Policy Project is a nonprofit, Lifeline for Children, Families, and Communities” (Washington: Center for Children and Families/University of North Carolina North Carolina nonpartisan coalition of congregations, Rural Health Research Program, June 2017), available at https://ccf. organizations, and individuals promoting public georgetown.edu/wp-content/uploads/2017/06/Rural-health-final.pdf. policies to improve the lives of low-income 4 Data retrieved from the American Community Survey Fact Finder, Alabamians. Visit https://arisecitizens.org. “Health Insurance Coverage Status and Type by Ratio of Income to Poverty Level in the Past 12 Months by Age” (Washington: United States Census Bureau, 2016), available at https:// factfinder.census.gov/faces/tableservices/jsf/pages/productview. xhtml?pid=ACS_16_1YR_B27016&prodType=table. 5 K. Wagnerman, “Medicaid: How Does It Provide Economic Security for Families?” (Washington: Georgetown University Center for Children Georgetown University and Families, March 2017), available at https://ccf.georgetown.edu/ Center for Children and Families wp-content/uploads/2017/03/Medicaid-and-Economic-Security.pdf. McCourt School of Public Policy 6 The estimate of Alabama children under 19 percent FPL who Box 571444 are uninsured (6.2 percent) is based on an analysis of the 2016 Integrated Public Use Microdata Series (IPUMS), prepared by the 3300 Whitehaven Street, NW, Suite 5000 University of Minnesota Population Center (IPUMS-USA, University Washington, DC 20057-1485 of Minnesota, www.ipums.org). We establish a 2016 estimate of Phone: (202) 687-0880 uninsured children who are under 18 years old and live in households with income below 19 percent FPL. Children for whom poverty status Email: childhealth@georgetown.edu could not be determined are excluded. 7 Alabama’s 2.4 percent rate of uninsured children was retrieved from J. Alker and O. Pham, “Nation’s Uninsured Rate for Children ccf.georgetown.edu/blog/ Drops to Another Historic Low in 2016” (Washington: Georgetown University Center for Children and Families, September 2017), available at https://ccf.georgetown.edu/wp-content/uploads/2017/09/ facebook.com/georgetownccf Uninsured-rate-for- kids-10- 17.pdf. 8 M. Karpman and G. Kenney. “Quicktake: Health Insurance Coverage for Children and Parents: Changes Between 2013 and 2017” twitter.com/georgetownccf (Washington: The Urban Institute, September 7, 2017), available at http://hrms.urban.org/quicktakes/health-insurance-coverage-children- parents-march-2017.html. 4 ALABAMA’S PROPOSED MEDICAID WORK REQUIREMENT CCF.GEORGETOWN.EDU August 2018