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By Sam Shaeffer, Chief Executive Officer of Center for Employment Opportunities
The Challenge
New Medicaid work requirements go into effect in less than four months. For the first time in our nation’s history, millions of Americans’ healthcare coverage through Medicaid will hinge on the number of hours they work each month. On January 1, most states will be vastly unprepared—both to administer these new requirements and to help people find the work they need to remain insured.
Despite the imposition of work requirements, H.R. 1 created no new support for job training. People who can’t find work will lose their healthcare coverage. Leveraging the country’s existing workforce infrastructure to support people in meeting requirements is our best near-term strategy. Doing this will require money and enhanced coordination. I call this approach “Medicaid Employment & Training” (Medicaid E&T), but it isn’t a proposal for a new federal program.
Workforce and health programs frequently operate in silos. Medicaid E&T could construct a bridge between both sectors. I believe we have the tools to quickly establish a Medicaid E&T initiative(s) using existing funding pathways—one that could just as easily be dismantled if work requirements are eventually repealed. The following outlines strategies that government, nonprofit, and philanthropic entities can pursue to mitigate harm.
Medicaid E&T does not need to be a single program. Rather, it is a framework for using existing workforce, Medicaid, state, local, and philanthropic resources to help people at risk of losing healthcare find and maintain employment. It could be a state-level program that offers wages for job training through local nonprofits; an innovative pilot program through a Section 1115 waiver; an expansion of the SNAP Employment & Training (SNAP E&T) program to support Medicaid recipients also receiving SNAP; or cash assistance initiatives funded by philanthropy or state governments so people can meet the income threshold for Medicaid work requirements.
To be clear, I believe Congress should repeal these work requirements. Experience shows that they don't increase employment. Instead, they increase paperwork, causing people to lose coverage because of administrative hurdles rather than a lack of effort. But work requirements remain politically popular in many circles. If repeal efforts are unsuccessful in the near term, we need a plan to help people and states navigate these new requirements.
In short, if the government is going to require work, it should also invest in helping people find it.
The Most Vulnerable Populations Will Be the Most at Risk
Few populations will be as vulnerable as people returning from incarceration. In nearly 20 years of working in reentry, I have seen tens of thousands of people come home and be deeply driven to find work. Standing in their way are constrictions based on their convictions, strict parole conditions, fines and fees associated with their sentences, among numerous other barriers. H.R. 1, however, provides only a three-month exemption before formerly incarcerated individuals must demonstrate they are working 80 hours per month or earning at least $580 per month. These requirements exist in stark contrast to the reality of reentering the job market after years in prison. Unemployment during the first year after release can reach 60 percent. Many justice-impacted people could lose healthcare precisely when they need it most.
Reentry becomes a race against the clock: find a job, work enough hours, and repeat the process. Miss the threshold, or simply fall victim to a reporting mistake, and healthcare coverage disappears.
Work requirements threaten to undo what has been a promising trend in the last 10 years. Since the passage of the Affordable Care Act, more and more states have enrolled people leaving incarceration in Medicaid up to three months prior to release. For example, according to leadership at the New York State Department of Corrections and Community Supervision, New York has seen recent pre-release enrollment exceed 90 percent.
People leave prison sicker and less healthy than when they enter. I have seen firsthand how this coverage changes the trajectory of someone’s reentry journey. Instead of waiting until a condition becomes an emergency, they can see a doctor, refill prescriptions, and begin focusing on rebuilding their lives. Medicaid coverage ensures that a group of people with inordinately high rates of chronic illness and unattended medical issues has coverage the moment they return home.
Build on the Existing SNAP E&T Infrastructure
The good news is that we already have a program that can help mitigate the impact of work requirements. When Congress implemented work requirements for SNAP, it also created SNAP Employment and Training (SNAP E&T). Decades later, the 2018 Farm Bill allowed SNAP E&T to subsidize paid training opportunities. It meant that people who were enrolled in SNAP food benefits could also take part in paid apprenticeships or transitional jobs to hone their skills. The food benefits of SNAP can offer a lifeline to someone living in poverty, while E&T services build a bridge to lasting independence.
Through SNAP E&T 50/50, organizations that provide E&T activities are reimbursed up to 50 percent of the cost of delivering services to SNAP recipients if the services are initially paid for by nonfederal dollars. SNAP E&T 50/50 offers sustainable funding for nonprofits providing workforce development services. This kind of security ensures continuity of service to communities that need it most.
SNAP E&T participants also receive additional supportive services like transportation and childcare to support their job search.
SNAP E&T programs work. Independent evaluations show that Center for Employment Opportunities (CEO) participants are 48 percent more likely to be employed after three years. And paid training programs lead to quality jobs. CEO also couples work-based learning with opportunities to earn advanced credentials, such as a commercial driver’s license. These courses are supported by SNAP E&T as well. At CEO, internal analysis reported that participants who couple a transitional job with an advanced credential increase their earnings by 30 percent.
Today, SNAP E&T supports high-quality workforce programs across the country with strong bipartisan support. The beauty of SNAP E&T is its ability to scale. States can expand it using federal dollars each year, depending on need.
Allow Medicaid Waivers to Fund Job Training
Innovation is already built into Medicaid. Section 1115 waivers allow states to experiment with novel healthcare solutions. Recognizing them as social determinants of health, many states have already used these funds to pilot employment and housing initiatives.
In 2018, the Washington State Health Care Authority developed five initiatives under a Section 1115 Medicaid Transformation waiver (MTP). MTP targeted two dominant social determinants of health: housing and employment. Through this waiver, the state offered supportive housing and supported employment to Medicaid beneficiaries with behavioral health needs, among other risk factors. Participants in this program accessed mental healthcare and substance use disorder treatment at nearly double the rate of Medicaid enrollees who didn’t participate in Washington State’s supportive employment program. These kinds of results show how job training programs serve as a tether to crucial medical treatment.
The Centers for Medicare & Medicaid Services should grant new waivers that allow for the scaling of job training programs to ensure continuity of care and enable people to meet work requirements.
Establish State-Level Medicaid E&T
States can also independently increase job training programs for Medicaid recipients. The infrastructure for workforce development is already in place. Yes, it will cost some money upfront, but it will keep people’s healthcare turned on and should reduce costly services like emergency room visits. It is in the budgetary interest of states to keep people covered and avoid the cascading public health costs associated with an uninsured, less healthy population.
States receive 90 percent reimbursement from the federal government for everyone enrolled in the Medicaid expansion population who will be disproportionately subjected to work requirements. Helping them maintain coverage also means maintaining that 90 percent reimbursement.
States have the flexibility to implement or take advantage of E&T programs. Furthermore, states are already partnering with the federal government to distribute funds for job training for nutrition benefit recipients through SNAP E&T. This program can be expanded to include Medicaid recipients who are also SNAP-eligible.
As state legislators reconvene this fall and winter, officials should contemplate funding structures that can sustain paid workforce development opportunities for Medicaid recipients.
Fund Cash Stipends to Meet Income Thresholds
The maze of reentry obligations may cause individuals to fall short of the income threshold to maintain benefits. Flexible cash stipends can help address that gap. For instance, if someone earns only $400 in a month, time-limited assistance can help that person meet the $580 income threshold to maintain their healthcare.
During the pandemic, CEO distributed over $24 million to 10,000 people returning from prison—the largest direct cash assistance program for formerly incarcerated individuals ever mobilized. Independent evaluations from MDRC showed that the cash assistance helped people find and maintain employment and led to a 40 percent decrease in parole violations six months after the program.
Both states and philanthropists can fund direct cash assistance pilots to ensure continuity of care.
The vast majority of incarcerated people—upward of 95 percent—will eventually reenter society. They will experience rates of chronic illness and unemployment at higher rates than the general population. Medicaid work requirements ignore the realities of reentry and the challenges that come with it.
But these new requirements are fast approaching, and they demand investment in workforce development so we can help people avoid the worst of their impact. We have the blueprint. We need public-sector and philanthropic buy-in. Now is not the time to scale back. Medicaid E&T asks our state government and philanthropic partners to think creatively and invest boldly. Until the federal government provides the support people need to succeed, we must build it ourselves.
