Report estimates Medicaid work requirement will cost state $25 million

The price tag attached to the proposed Medicaid work requirement that is making its way through a public comment period now could be as high as $25 million, according to the Commonwealth Institute for Fiscal Analysis.

And meanwhile, the institute, a liberal-leaning nonprofit that performs fiscal and policy analysis, estimates that 21,600 people could be kicked off Medicaid coverage because they can’t meet the requirements. According to the proposed program, which will need to first be approved by the federal government, enrollees cannot miss more than three non-consecutive months of work or community engagement in a year.

“All evidence suggests that work requirements as written in the proposed waiver will be burdensome for all involved — individuals and families as well as the state,” the institute said in its analysis. “As policymakers proceed, they should look to available evidence to make informed decisions about how to structure a new program effectively.”

The program will also only apply to a small group of people, as well. A Joint Legislative Audit and Review Commission report from earlier this year estimated that about 32 percent of the Medicaid expansion population would be subject to the requirements.

But the Commonwealth Institute points out in its report that nationally, only 1 percent of enrollees don’t fit into the numerous work requirement exemption categories, which applies to those who are already working, are disabled or ill, are caretakers or are students, retired, or already looking for work.

“This means that the state would incur additional expenses and administrative work to enforce a requirement that the vast majority of people are complying with already or unable to,” the institute’s report says.

The $25 million figure also includes the cost of people getting kicked off the Medicaid program for not meeting the requirements, as well. Those individuals will still seek health care, and will likely be caught in safety net programs that the state pays for.

“This means it will cost the state additional money to kick people off of Medicaid because these individuals will still seek medical services, and the state will end up picking up some of that expense without the federal match rate to assist with those costs,” the institute argues. “Without funding for adequate work support or sufficient exemptions for those unable to work, the current work requirement language is leading the state down a path that will not improve employment, will kick people off their coverage and will ultimately cost the state more money. It’s not too late for Virginia to change course by focusing on not removing people from their health coverage and using the savings and other funds to invest in support that actually leads to long-term employment.”