Austerity By Paperwork

Complicated eligibility requirements are meant to undermine social programs. Arkansas just proved how well they work with its new Medicaid rules.

An employee of the Oregon Department of Transportation. Oregon DOT / Wikimedia

Conservatives love negative incentives. Many will tell you flat-out that the best way to solve pervasive poverty is to make being poor as unmanageable as possible.

“The more you make people comfortable in their poverty, the more you strip them of the reasons of standing up on their own again,” says right-wing media personality Glenn Beck.

Celebrity neurosurgeon-turned-HUD-director Ben Carson warns against making public housing too livable because “a comfortable setting” would “make somebody want to say: ‘I’ll just stay here. They will take care of me.’”

In order to get poor people off their asses — ass-sitting being the number one cause of poverty — the state needs to restrict handouts and pare down cushy social benefits, like providing people with housing that doesn’t resemble prison, or giving them health insurance even when they can’t afford the exorbitant and arbitrary costs imposed by the private insurance industry.

It was in this spirit that the Republican Party floated the idea of mandatory work requirements for beneficiaries of Medicaid. They made a weak attempt to frame it as a positive incentive rather than a negative one. “We don’t want to throw people out in the cold, but we want to help them understand the dignity of work,” said Senator John Kennedy of Louisiana. The point is “to say ‘you can keep your benefits, but let us help you get a job.’”

The subtext is that if you don’t get a job you don’t get to keep your benefits. As punishment for not entering the workforce, jobless Medicaid recipients will be denied affordable medical attention. So, you see: negative incentive.

There are two obvious problems with this arrangement. First, not everyone on Medicaid can work, for a variety of reasons. And second, there are not always jobs to be found — especially for people with little formal education, or criminal records. The third problem is less obvious, but exposes a central feature of the logic of austerity: lots of people who are currently eligible for Medicaid, including those who do work, are unable to meet the work requirement because it is complicated and poorly advertised.

In Arkansas, the first state to test out the Medicaid work requirements encouraged by the Trump administration, people are losing their benefits by the thousands — not because they refused to follow the work-requirement procedures, but because they didn’t know those procedures existed at all.

“In the first month that it was possible for people to lose coverage for failing to comply, more than 4,300 people were kicked out of the program for the rest of the year,” reported the New York Times this week. “Thousands more are on track to lose health benefits in the coming months. You lose coverage if you fail to report three times, and the program, in effect for three months, is slowly phasing in more people.”

Early numbers suggest that phasing Medicaid recipients into the work requirement program is a recipe for phasing them out of Medicaid.

One researcher went to Arkansas to interview Medicaid beneficiaries. Of the eighteen she queried, twelve had no idea about the work requirements. The state had sent letters and emails, but it barely made an impact. The emails had an open-rate of 20 to 30 percent. Letters are unreliable — not only do poor people receive a constant deluge of official letters telling them what they owe, to whom, and what’s changed about this or that policy, but they also move around a lot. The state called people, too, but they rarely picked up their phones.

Without knowing for certain that it had successfully informed people of the new rules, the state proceeded to implement those rules. Now thousands of people whom the state has already determined to be in financial need of public health insurance are no longer covered, and thousands more are in the crosshairs.

Whether or not Arkansas Republicans profess dismay over employed Medicaid recipients losing benefits to which they are entitled (to my knowledge, they haven’t expressed such dismay), the fact remains that it saves the state money on social programs. And if there’s anything conservatives love more than negative incentives, it’s slashing the welfare budget. Not only does the GOP have an ideological commitment to small government (the military and police excepted) but they’re also responsible for balancing budgets in states where they’ve engaged in a decades-long program of lowering taxes on the wealthy and industry, effectively emptying the public piggybank.

In fact, Arkansas Governor Asa Hutchinson revealed a plan late last month to reduce the state’s top-marginal tax rate, giving away $144 million to the state’s richest residents. That money has to come from somewhere, right?

Austerity in the implementation of social programs doesn’t always involve the overnight elimination of benefits and services. It’s often more clever than that, and complicated program design is a big part of the story. Complicated programs are dysfunctional programs, and dysfunctional programs don’t reach the people they’re intended to. Every person a program fails to reach is a reduction in the cost of that program for the state. (Of course, these costs often return in another form, but Republicans are not used to thinking holistically about social problems.) Complicated program design thus makes programs less expensive, which theoretically offsets the costs of tax giveaways to the rich — an indispensable feature of both Republicans’ and more than a few Democrats’ agendas.

Furthermore, austerity-minded politicians can point to dysfunctional programs as evidence that public benefits are a failed experiment, and that privatization is the way forward. Complex patchworks of means-tested and heavily gatekept social programs don’t reach the people they’re supposed to, and are thus vulnerable to attack by those who would eradicate welfare outright.

The point of work requirements isn’t actually to incentivize poor people to get jobs. The majority of Medicaid recipients are wage-earners, and of the rest, a plurality are either ill or disabled, or they perform necessary unpaid work in families supported by other breadwinners, like taking care of children, and elderly or sick relatives.

No, the point of Medicaid work requirements — as with any new restrictive alteration to social program eligibility — is to thin the rolls. Arkansas has just demonstrated how effective the strategy is. Far from acting as a deterrent, they’ve likely just encouraged Republicans in other states to follow suit.