Californians Face Health Coverage Loss Due to Medicaid Work Rules

The Impact of Medicaid Work Requirements on California

California is facing a significant shift in its Medicaid program, known as Medi-Cal, due to the implementation of a new work requirement for recipients. This policy, approved by the Republican-led Congress and signed by President Trump, marks the first time that such a requirement has been mandated nationwide. The rule will require certain Medi-Cal beneficiaries to prove they are working, attending school, or volunteering at least 80 hours per month every six months.

According to estimates from state health officials, as many as 3.4 million people could lose their insurance under this new rule. Governor Gavin Newsom has referred to the process as a "labyrinth of manual verification," which could make it significantly harder for individuals to maintain their coverage. Martha Santana-Chin, head of L.A. Care Health Plan, which serves about 2.3 million Medi-Cal patients in Los Angeles County, warned that up to 1 million people, or 20% to 40% of her members, might lose their health insurance.

The work requirement applies to individuals whose income falls between 100% and 138% of the federal poverty limit. This group became eligible for Medi-Cal when the program was expanded under the Affordable Care Act. The rule includes exceptions for those who are pregnant, in addiction treatment, or caring for children under 14. However, the implementation of these requirements remains uncharted territory, with no clear guidance yet on how the system will operate.

Challenges and Concerns

Experts have raised concerns about the potential challenges associated with the new work requirements. Joan Alker, a professor at Georgetown University who studies Medicaid, noted that people may lose coverage due to various reasons, including confusion about eligibility changes, difficulty proving their status, and problems with technology or paperwork. Additionally, some individuals may not appeal rejections, leading to loss of benefits.

The state of California estimates that about one-third of the 15 million people enrolled in Medi-Cal will be required to meet the work criteria. These individuals typically earn less than $21,000 for a single person or less than $43,000 for a household of four. The projected number of people losing coverage is based on experiences in states like Arkansas and New Hampshire, where similar programs were implemented but later overturned by courts.

Ryan Long, director of congressional relations at the Paragon Health Institute, believes that advancements in technology and a national focus on work requirements could reduce the burden of verification. The budget bill includes $200 million in grants for states to update their systems. Long argues that concerns about people losing healthcare are a "straw man argument," citing public support for work requirements.

A recent poll by the health research group KFF found that 62% of American adults support tying Medicaid eligibility to work requirements. However, support drops significantly when people learn that most Medicaid recipients are already working and that many would risk losing coverage due to the paperwork burden.

Implementation and Uncertainty

Newsom highlighted the complexity of the process, showing reporters an image of a 36-page form that people may need to fill out to keep their insurance. Many Californians already face similar paperwork when enrolling in Medi-Cal or Covered California, the state’s health insurance marketplace.

Experts say it is too soon to determine what system will be used for verifying work eligibility, as federal guidance is still being finalized. Newsom’s office directed questions to the Department of Health Care Services, which runs Medi-Cal. A spokesperson there said officials are still reviewing the full operational impacts of the work requirements.

Georgia is the only state that has implemented a lasting work requirement for Medicaid. The state requires individuals to work at least 80 hours per month and earn less than the federal poverty limit. Despite the program's launch in July 2023, only 8,000 people have been enrolled as of June 2024. The program has cost over $100 million, with significant funds allocated to marketing contracts.

Jarrod McNaughton, CEO of the Inland Empire Health Plan, noted that California’s 58 counties, which administer Medi-Cal, are at the forefront of implementing the new rules but have yet to receive detailed guidance on the eligibility process. Questions remain about whether the verification will be done online, through paper forms, or other methods.

In the meantime, health plans are working to make the process as manageable as possible, focusing on community outreach and connecting Medi-Cal recipients to volunteer opportunities. As the implementation of the work requirements continues to unfold, the impact on California’s residents remains uncertain.