Assumptions

We’ve all been reading and hearing about the BBB – the Big Beautiful Bill (or the Big Bad Bill) – which Republicans support and Democrats are certain will bring about economic doom. It should not surprise you that I am in the “doom” category, but I want to talk a little about one of the assumptions that underpins the Medicaid portion of this bill.

My congressman, Rob Wittman (R), is one of many Republicans who have made statements like the following about their support for this bill:

“There are no cuts in Medicare and Medicaid, I want to emphasize that,” he said. “What we’re saying is, if you’re able to work, we want you to work in return for receiving Medicaid. So we’re not throwing people off the rolls. . . The population that Medicaid is intended for, those folks are going to continue to receive their benefits. But these are the people that are not eligible for Medicaid, period.”

This bill does not make direct cuts to Medicaid; however, by increasing documentation and reporting requirements, the bill will reduce Medicaid expenditures. The supporters of the bill, like Congressman Wittmann, believe that making it more difficult to prove eligibility will weed out only those who are not eligible. This is an incorrect (and deadly) assumption.

Here’s a breakdown of the documentation and reporting requirements under the One Big Beautiful Bill Act as it affects Medicaid recipients: The new law requires Medicaid expansion and able-bodied adults to:

1. Log 80 hours/month of approved activities (work, training programs, volunteer service, or school)

2. Provide proof of eligibility at application, renewal, and possibly on a monthly basis. The various states will be responsible for developing and implementing new verification systems.

   1. We should note that the states have not budgeted for these new requirements. This means they will not do it well as they try to catch up to the bill’s requirements.

3. Undergo biannual or frequent eligibility verifications. This will include stricter income verification as well as service fees or increased copays for services received by those between 100% and 138% of the poverty line.

4. Pay fees if their income exceeds poverty thresholds.

5. Document exemption statuses where applicable. Exempt groups include parents or caregivers of children under 14, disabled or medically frail individuals, pregnant women, and disabled veterans. These exemptions must be documented and re-verified periodically.

This will result in significant risk of coverage loss – not necessarily due to failure to meet work hours, but because of complex and burdensome reporting requirements. This is what has happened in the past. For example, when Arkansas attempted to impose work requirements, 18,000 people lost coverage – not necessarily because they were ineligible, but because they failed to report properly. Complex and inconsistent reporting requirements disproportionately impacted individuals with multiple low-wage jobs, irregular work hours (like shift work in fast-food restaurants), and limited access to internet or transportation.

I wanted to capture this problem in a chart. This is what I came up with. I’ll attempt to explain what I’m getting at, and you’ll have to let me know what you think.

This is fairly simple. Eligibility for Medicaid is on the X axis, and the ability to comply with reporting requirements (internet access and tech capability) is on the Y axis. Everyone agrees that people who are eligible for benefits should receive them. But this matrix shows that there are actually four categories of individuals, as described in each of the four quadrants.

People who fall into Quadrant 1 will probably not find that their Medicaid benefits will be cut or decreased. They are eligible for benefits and also have the capacity to prove their eligibility.

People who fall into Quadrant 3 will lose their benefits. They are not eligible and are unable to access resources by which they might create an image of eligibility — aka, cheat. Most people would agree that individuals in this category should not receive Medicaid benefits.

Quadrant 4 identifies the group that will suffer most from the Medicaid cuts in the OBBB – the people who are eligible for benefits but unable to prove eligibility under the more stringent and frequent reporting requirements.

I want to tell you one story that illustrates this problem. I have a friend (I’ll call him George) who has an adult disabled daughter (I’ll call her Mary). When the state of Virginia expanded Medicaid coverage a few years ago, George began the process of procuring Medicaid coverage for Mary. He spent hours on the phone over several weeks, being bounced from person to person, often repeating information and correcting misunderstandings generated by having conversations with different people on different days. He was finally able to get Mary covered by Medicaid.

But George is highly educated, generally capable of navigating cell phone and computer technology, resourceful, a skilled communicator, and retired. Most people who fall in Quadrant 4 do not have someone like George to navigate the newly created bureaucratic red tape the OBBB creates.

And now there’s Quadrant 2 – people who are ineligible to receive Medicaid services but will find a way to manipulate the system to secure coverage anyway. Here’s your fraud, waste, and abuse.

Supporters of the OBBB are assuming that everyone currently on Medicaid will sort easily into Quadrants 1 and 3 – people who are eligible and can prove it, and people who are ineligible and will be unable to cheat the system. But here’s the problem – no supporters of the bill have any data to prove this assumption. The Quadrant 4 people will fall out of the system, and Quadrant 2 people will still be creating fraud, waste, and abuse.

What do you think about this? What am I missing in this analysis?