What happens when the GOP’s war on welfare comes for Medicaid

As House Speaker Paul Ryan tries to renew welfare reform efforts on Capitol Hill, his home state is way ahead of him. 

Getty Images / Diana Ofosu
Getty Images / Diana Ofosu

Thomas Penister was uninsured for years after serving time in prison. In 2015, he applied for Medicaid coverage to see a primary care doctor as his mental health problems became debilitating. He was relieved to finally discover what was wrong: his doctor diagnosed him with post-traumatic stress disorder, attention-deficit disorder, severe sleep apnea (a common nighttime breathing disorder), and anxiety.

Continued treatment of these illnesses allowed him to get his life back, he said. He’s still unable to work full-time, so he volunteers at a number of nonprofits with flexible work hours, like Urban Underground’s after-school program, to stay productive.

“Sometimes I have all the energy in the world. Other days I can be totally [fatigued],” the 36-year-old Milwaukee resident told ThinkProgress.

Penister is among some 147,000 “childless adults” in Wisconsin on Medicaid, dubbed BadgerCare statewide, only because, in 2014, the state expanded eligibility to people who fall within the federal poverty level (FPL), meaning the person makes $12,060 or below just for themselves


Now, Gov. Scott Walker (R) is trying to transition people like Penister off of Medicaid, as the insurance program was originally intended just for the disabled, elderly, pregnant persons, or children. To do so, he asked the Trump administration to impose welfare-like restrictions like work rules and drug tests. 

It is… clearly a budgetary scheme to reduce the state’s obligations to low-income and poor people,” said Congresswoman Gwen Moore (D-WI).

The state might exempt Penister from the proposed work rules because of his mental illness. Even so, the proposed requirements and added paperwork altogether are more arduous which is especially concerning because he has accidentally missed renewing Medicaid coverage once under the current process. The experience triggered his anxiety and he was unable to pick up his medication. While Penister says he could rationalize overhauling other government programs, like cash assistance or food stamps, he fundamentally disagrees with any policy decision that makes health insurance harder to get.

“It’s not fair to compare the two,” said Penister. He’s also on food stamps, and doesn’t understand the conflation of all government programs, as the stakes are especially high if he loses Medicaid. “I understand that if you spend money on me, I have to get it back to you. But the people most unhealthy need to be taken care of by the healthy.”

“It doesn’t make sense to run health insurance like a welfare program”  

Republican lawmakers in Wisconsin aren’t the only ones trying to upend the program. A handful of states have sought federal permission to impose work requirements and other restrictions; Kentucky’s changes were the first to be approved, followed by Indiana, and Wisconsin is currently awaiting federal approval. As House Speaker Paul Ryan (R-WI) tries to renew welfare reform efforts on Capitol Hill to cut Medicaid spending nationwide, his home state is way ahead of him. 


“Wisconsin Works for Everyone is about helping people transition from public assistance into Wisconsin’s workforce,” said the governor in a statement in June 2017. Walker’s sweeping changes could inadvertently affect the roughly 1 million people statewide who depend on the public insurance program for health care. The application process will become more onerous for all, even those exempted from the changes. The goal, they say, is to encourage “personal responsibility” and get people like Penister working — who says he would, if he could.

Federal approval for Wisconsin’s Medicaid experimentation could happen any day now. If the state’s application is accepted, local lawmakers would not only impose an 80-hour-per-month work requirement, but establish monthly premiums for people living at or below the poverty level, require drug testing, have childless adults pay for ambulatory care, and limit a member’s coverage to no more than 48 months. Some groups — like people who are pregnant or disabled — are exempted from these changes.

“The people most unhealthy need to be taken care of by the healthy.”

“We project a decrease in enrollment,” a communications official with the Department of Health Services told ThinkProgress. The state expects enrollment will fall by 824 members within the first year of implementation. By year five, 5,102 are expected to disenroll and the state would save almost $49.8 million. 

The new requirements mirror other government safety net programs’, like cash assistance. And the federal overhaul to cash assistance, for instance, dramatically reduced enrollment — and not because these people escaped poverty. As such, many have argued for reworking cash welfare, not modeling other critical government programs after the now punitive, diminished program. And the effects to Medicaid could be more widespread as the insurance program enrolls more people.


“It doesn’t make sense to run health insurance like a welfare program,” Joan Alker, Medicaid expert and executive director of the Georgetown University Center for Children and Families, told ThinkProgress. “People’s health care needs don’t go away when you cut them out of the program.” For people to stay in good physical and mental health, they need to be continuously covered, she said. When people are in good health, they can support themselves. 

Delinking Medicaid and welfare

Medicaid was a part of the welfare package once upon a time. Before 1996, if a person was eligible for cash assistance, they were automatically eligible for food stamps and Medicaid. 

But it has since evolved: Medicaid pays for roughly half of all U.S. births, benefits for children with disabilities (because private insurance is less adequate), and rural hospitals. And Medicaid — not Medicare — is the largest insurer for long-term care, paying for things like nursing facility care and home health aid. As such, most view it as any other health insurance. But political party shapes perception. While Democrats and Independents overwhelmingly say Medicaid is not welfare, Republicans are split, according to the Kaiser Family Foundation’s January 2018 poll. 

The programs started to diverge in the 1980s, as Medicaid expanded benefits and eligibility to new groups and cash assistance did not, and officially parted ways during the 1996 welfare overhaul. “That’s when Medicaid became a health insurance program,” said Alker.

President Bill Clinton and Congress redesigned cash welfare to be temporary and transitional. They conditioned cash assistance with work, but not health insurance. And federal lawmakers gave state officials the flexibility to run cash assistance as they pleased, but asked that states keep Medicaid-eligible people covered. The federal government had adopted reforms from state pilot programs. In fact, Wisconsin’s 1995 “Wisconsin Works” experiment was largely adopted at the federal level. Former Wisconsin Gov. Tommy Thompson (R) is considered the “father of welfare reform.” 

The last time Congress tried to push a cash-welfare policy onto Medicaid, called block grant funding, they failed.

“There was a deliberate effort to disaggregate those benefits so as to discourage — and it works to discourage — people from enrolling in any one or the other programs, not to have them as a package,” said Congresswoman Gwen Moore (D-WI), former welfare recipient turned lawmaker. Intentional or not, as people dropped cash welfare (not necessarily because they were lifted out of poverty and didn’t need it), they dropped Medicaid. Many were uninsured for months.

Walker’s Medicaid overhaul adds “another layer,” the Wisconsin congresswoman said, to the longstanding conservative ideology that poor people need a job to get help. Walker does view his changes to Medicaid as an expansion of Thompson’s policies. Thompson’s changes to the cash welfare program in the ’90s moved thousands off assistance. In 2016, for every 100 poor families with children, only 20 received help. However, in 1996, 81 families received help, according to the Center on Budget and Policy Priorities.

It is also very clearly a budgetary scheme to reduce the state’s obligations to low-income and poor people,” Moore told ThinkProgress. “It’s important for people out there to understand that they should not buy into the narrative that these are just lazy bums that refuse to work … Most of the people on Medicaid, who are eligible to or who are capable of working, work but they are just too poor to pay for health care, and this will just increase their misery and may even hurl them deeper into poverty.”

The statistics back up Moore’s claims — nearly eight in 10 adult Medicaid recipients live in working families and the majority work themselves.

The dangers of such “personal responsibility” tactics are, most recently, evident in Indiana’s Medicaid program, which implemented some radical changes in 2015. About 25,000 adults were disenrolled for failing to pay their premiums and only half were able to find another source of coverage. Wisconsin is also trying to impose a monthly $8 premium for households with incomes between 51 to 100 percent of the poverty level, or under $16,240 annually for a family of two.

The changes are not always beneficial to patients, and may even be a waste of the state’s time and resources. ThinkProgress reached out to Wisconsin officials last year for data on cash welfare recipients, who undergo drug screening, and found that of the 1,838 applicants screened and 42 tested, only nine tested positive. This costs somewhere between $1,050 to $4,200. Because Medicaid’s enrollment is much larger than cash welfare’s, more money and time will need to be dedicated to visits.

Wisconsin’s Medicaid upheaval is deeply unpopular. Only five of the 1,000 comments submitted by the public actually supported Walker’s changes — and one of those comments came from the lieutenant governor. Many criticisms came from people within the medical community.

While certain welfare-restrictions, like work rules, poll favorably, recent events suggest any proposals that could jeopardize access to health care are deeply unpopular. In fact, the last time Congress tried to push a cash-welfare policy onto Medicaid, called block grant funding, they failed.