You get a dinner out; your neighbor loses their health insurance | Opinion
Here’s the deal the Republican Party is offering you: Your struggling, working neighbor loses their health insurance. In exchange, you get one dinner out.
Low-income working Idahoans’ health insurance is under threat from two fronts. On the one hand, the Republican majority in Congress has threatened to pass a national work requirement on Medicaid. And on the other, Idaho is one of a series of Republican-dominated states that will apply to allow it to implement its own work requirements.
Why would work requirements threaten people who are already working? Because working is one thing, and proving to a bureaucracy that you work is another.
The effect of a federal work requirement would be about 5 million people losing coverage, nearly all of whom work or are exempt from working, the Urban Institute found in March. In Idaho, about 20,000 such people would lose coverage, according to a recently published follow-up analysis.
Katherine Hempstead, senior policy adviser with the Robert Wood Johnson Foundation, which funded the two studies, said a consistent finding about work requirements in a variety of programs is that they mainly harm working people.
“A lot of people that lose coverage actually shouldn’t lose coverage,” she said. “Most people lose coverage because they aren’t able to comply with the requirements to report their work or explain why they should get an exemption.”
“A lot” is something of an understatement here. The figure supported by a number of studies is upward of 90%. So, nearly everyone who loses coverage shouldn’t. As Hempstead said, work requirements “work through mistakes.”
This happens because of the complexity of reporting, particularly for low-income working people.
“Maybe they report for the first time, but they forget to report the second time,” Hempstead said. “Maybe they’re working two jobs, and they report the first job but forget to report the second job. Or they don’t have internet.”
At the federal and state levels, GOP officials hope that cutting spending on Medicaid will free up funds for tax cuts and priorities like immigration enforcement. That’s unlikely to work.
The nonpartisan Congressional Budget Office summed up the evidence well in its 2023 report on the effect of a federal Medicaid work requirement: “In the agency’s estimation, under those requirements, federal costs would decrease, the number of people without health insurance would increase, the employment status of and hours worked by Medicaid recipients would be unchanged, and state costs would increase.”
There’s a double-bind in using work requirements to contain the costs of social programs: To the degree costs decline, it’s because you’re kicking working people out of the program, not because you’re weeding out welfare cheats or able-bodied people who simply refuse to work. Both are exceptionally rare, despite propaganda to the contrary.
So if the state gets really, really good at finding out if people are working, if it doesn’t kick deserving people off the program, then very few people will get kicked off. But that means you fail to cut the program’s costs. In fact, administering work requirements is complicated and expensive, so the state might make the program more expensive overall, as the CBO points out.
So, this year, if you or someone you care about loses their health care coverage, make sure to compare last year’s income tax bill to this one. It will probably be a bit smaller. For a small family with a median Idaho income, the difference (a bit over $120, according to the Idaho Center for Fiscal Policy) probably won’t be quite enough to cover one dinner out, but it comes close.
Of course, those making more than $700,000 a year will fare much better, getting over $5,000 a year in tax cuts.
Is that dinner worth your friend or neighbor going without health coverage, exposed to the likelihood they will have to declare bankruptcy if they slip and fall or get sick? Because that is the trade that lawmakers made this year. The push to make tax cuts for the wealthy as large as possible ate up all the room in the budget, forcing even Idaho’s new school voucher program to downsize the amount of money it will give to families in order to cover the growing costs of administrative overhead, as Idaho Education News reported.
There are increasingly loud alarm bells sounding that lawmakers may have made this bet without realizing they were stepping into a quickly souring economy, driven by haphazard tariff policy from the Trump administration. State tax revenue for last month came in more than a fifth below projections, the state recently reported, seeming to signal that the era of Idaho’s endless surpluses is over. A few more revenue reports like that, and we’re going to have to start talking what services will get unexpectedly cut because there’s no revenue to cover them.
For all the talk that the GOP has become the party of working people, it seems that in its policy, it remains devoted to the interests of the wealthy.