Trump threatens to bankrupt states with Medicaid work requirement plan

AURORA, CO - JULY 28:  Two-month-old Karina Arredondo, the child of undocumented Mexican immigrants, receives drops of children's Tylenol after getting a vaccination at the low-cost Rocky Mountain Youth Clinic on July 28, 2009 in Aurora, Colorado. Funded primarily through donations and grants, Rocky Mountain Clinics treats mostly children of uninsured parents, those on medicaid and others whos parents cannot afford to pay the high deductibles charged by many health insurance policies.  (Photo by John Moore/Getty Images)

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The Trump administration is dead set on destroying Medicaid and is getting plenty of help from Republican governors, even when the process threatens to bankrupt their own states. Witness Kentucky, where Gov. Matt Bevin’s embrace of work requirements increased the state’s costs by more than 40 percent—just in a matter of weeks—before a federal judge ruled against the work requirements last month. That’s according to an analysis by credit rating agency Fitch Ratings.

“In its biennial budget, Kentucky’s Medicaid administration costs increased more than 40%, or $35 million, from prior biennium to $116 million, which Fitch partially attributes to implementing Medicaid work requirements,” wrote Eric Kim, the lead analyst for Fitch on the report. Work requirements on enrollees causes a major administrative burden on the state in setting up and implementing the systems to track those enrollees. Kentucky and the other states trying to impose work requirements have been very upfront about why they want to do it, besides the fun Republicans get out of making poor people jump through humiliating hoops and suffer. Their aim is to drive people out of the program and ostensibly save money.

Kentucky argued that some 95,000 people would leave Medicaid in the next five years, saying it would save $300 million to $400 million. Those are savings that will be substantially eaten into by both the costs of setting up these systems and by creating tens of thousands of uninsured people who will still need health care from somewhere. That means the state and local governments having to spend more to cover the costs of uncompensated care, and hospitals in rural and underserved areas closing down because there isn’t the money to keep them open. That’s been happening all over in states that refused Medicaid expansion from the beginning.

But the Trump administration is still all in on this project. “We are very committed to this,” CMS administrator Seema Verma said last week at a Politico Pro summit. “We are looking at what the court said. We want to be respectful of the court’s decision while also wanting to push ahead with our policy initiatives and our goals. … We are trying to figure out a path forward.” A path forward that will bankrupt the states and take away one of the few good things that’s happened in the lives of the working poor in the past decade.

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