The Cruelty Is the Point: Work Requirements Don’t Lift People Up—They Drag Us All Down.
In last week's Substack, we wrote about how politicians have been scapegoating a very specific population of people: “able-bodied adults without dependents,” or ABAWDs for short. These are the people targeted by new food assistance and health insurance work requirements in Trump’s reconciliation bill.
Despite what policymakers want you to believe, ABAWDs are not lazy dudes playing video games on their mom’s couch. They are parents, workers, caregivers, and community members who have been lumped into a politically convenient category in order for Republicans in Congress to cravenly carve up the social safety net.
Yet, while stripping access to food assistance and health insurance obviously hurts ABAWDs, (pushing more of them into poverty and crippling medical debt), it also hurts everyone else.
Excluding so-called “undeserving” groups from the social safety net has negative effects for everyone. For example, prohibiting those with past convictions for felony drug possession from accessing food assistance has been shown to increase crime. Conversely, supporting ex-offenders with cash assistance and job training actually saves the government money on criminal justice expenditures.
The harmful effects of senseless policy
Trump’s broadside against ABAWDs on Medicaid will be particularly damaging for state budgets, the health-care system, and the economy as a whole.
First, our best evidence suggests that work requirements don’t do the one thing you’d think they’d do, which is increase employment. As we discussed last week, most ABAWDs already work, and those who don’t largely can’t because of factors outside their control (such as undiagnosed disabilities, job availability, or caregiving duties). Therefore, simply requiring them to work more won’t increase their employment.
And the data backs this up. During the first Trump administration, nine states imposed work requirements on ABAWDs receiving Medicaid. Although courts eventually halted implementation, Arkansas was able to implement its work requirements in June 2018 and administer them for nine months. After six months, researchers found the policy had resulted in no significant change in employment.
Despite this, many thousands lost their Medicaid coverage—not because they “refused to work,” but because of widespread confusion and lack of awareness about the reporting requirements. Over 95 percent of those affected by the new requirements were already working or qualified for an exemption (e.g., having a recognized disability or having minor dependent children). Thus, work requirements were a one-way ratchet, booting thousands off their health insurance with paperwork and red tape. This is why health-care experts expect millions to lose their Medicaid coverage in the coming years due to “administrative hassles” imposed by Trump’s budget bill.
Next, states are on the hook for administering a massive monitoring system to ensure compliance with new work requirements. The Government Accountability Office found that the Medicaid work requirement plans submitted during the first Trump administration would cost states tens of millions to hundreds of millions of dollars to administer each year. States will have to cover these costs with tax increases or cuts to other services and programs, with no funding support from the federal government.
Finally, kicking “undeserving” adults off of medical insurance simply invites a process similar to the death spiral in health insurance markets. When Medicaid recipients lose coverage, they’ll likely avoid going to the doctor, including for preventative care. Eventually, injuries or illnesses require a visit to the hospital. When that happens, the uninsured patient gets a bill they’re unlikely to be able to pay.
Hospitals are then forced to “eat the cost” of this unpaid bill or increase the price they charge insurance companies for drugs or procedures (which is ultimately passed on to everyone else in the form of higher insurance premiums). This means our current system, which relies on profitable hospitals, is put under enormous strain.
This is particularly true in rural areas, where hospitals are already operating at or near a loss and cannot weather this storm. In fact, almost half of rural hospitals are nearing insolvency, and a significant number are now in danger of closing. Others will have to deeply cut staff and services. The result will be crowded emergency rooms, longer drives to get care, decimated rural economies, and even further strain on state budgets.
A looming threat for future debates
The consequences of creating a category of people—ABAWDs—to mask greed has profound ripple effects, not just on the so-called undeserving, but everyone else. The ABAWD designation is also conveniently flexible, allowing policymakers to redefine the category to include not just individuals close to retirement age, but also parents of older children (as they did in Trump’s reconciliation bill). Next time, it will inevitably include more and different people as a pretext to further unwind the safety net.
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