State lawmakers are scrambling to create a revenue plan that can balance the $32 billion dollar spending plan passed by the legislature last week. While talks of tax hikes, borrowing and cutting corporate welfare continue, the spending plan also includes a significant $350 million reduction in Medicaid spending, specifically the Medical Assistance Capitation line item, or managed care. That's almost a ten percent reduction over last year’s spending!
The reduction in Medicaid spending indicates lawmakers are serious about enacting meaningful welfare reform, but what kind of reforms could generate this level of savings without harming beneficiaries?
The answer is work requirements. History shows that people without jobs can't escape poverty nor increase their incomes to afford health insurance.
When Kansas strengthened work requirements for SNAP (food stamps), they found former recipients' incomes rose by an average of 127 percent. When Maine instituted SNAP work requirements caseloads dropped by 80 percent. Now states are looking to apply these lessons to Medicaid.
This year, Maine submitted a waiver to the federal government asking for permission to apply Medicaid work requirements to parents. Similarly, governors in states such as Arizona and Wisconsin have proposed work requirements for the able-bodied enrolled in Medicaid. Wisconsin Governor Scott Walker's proposal seeks work requirements for the able-bodied or a four-year limit on benefits.
Closer to home, Rep. Seth Grove’s HB 1407 will instruct the Department of Human Services to apply for a Medicaid work requirement waiver, create health savings accounts and limit Medicaid eligibility to five years.
If we are to put our fiscal house in order, addressing the long-term growth while improving the quality of programs must be a top priority. Putting meaningful work requirements in the welfare code for Medicaid, SNAP and other programs would promote fiscal responsibility, increased independence and ultimately a higher quality of life for all Pennsylvanians.