Debate over Debt Ceiling Could Affect 600,000 Americans’ Health Insurance

As part of hurried discussions to raise the US debt ceiling, the health insurance of 600,000 Americans is at risk.

As part of a debt ceiling agreement with the White House, House Republicans are proposing to impose stricter work requirements for people receiving federal welfare, currently known as Temporary Assistance for Needy Families, the Supplemental Nutrition Assistance Program (SNAP), and Medicaid.

“We can’t be spending more money next year. We have to spend less than we spent the year before. It’s pretty easy,” Speaker Kevin McCarthy (R-Calif.) said Friday.

According to a Congressional Budget Office report from April, under the GOP proposal, 600,000 Americans — largely low- and moderate-income individuals who are capable of working and are between the ages of 19 and 56 — would lose their health insurance after being disqualified from receiving federal Medicaid money.

According to the CBO, that would save the government $109 billion over the following ten years, which is a small portion of the $32 trillion in federal debt that Republican and Democratic-led administrations have accumulated.

Prior to caving down to Republican demands for negotiations before a potential June 1 run-out of money date, the White House had repeatedly written off increasing the debt ceiling as being non-negotiable.

The likelihood is high that those who are going to lose their access to Medicaid, poverty, or SNAP assistance won’t even be aware of it until it’s too late.

In 2017, Arkansas passed Medicaid work restrictions, which caused tens of thousands of people to lose their coverage. Attorney Trevor Hawkins of Legal Aid of Arkansas began canvassing his state to inform individuals that their lives were about to change.

He told The Hill the people he met on the road had no idea what was coming.

“Most people didn’t realize these work requirements were a thing until they started getting notices that there were problems,” he said. “They were getting marks of not complying, but it was just because they didn’t know about it.”

“I literally traveled the whole state, talking to people in libraries, gas stations, barber shops — you name it. I spread flyers all across the state,” he said. “It was a hard time on me personally, just kind of seeing how this was affecting people, doing everything I could to try to spread the word.”

Treda Robinson, an Arkansas resident who works and nearly lost her health insurance due to the work requirement law before filing a lawsuit against the state, claimed that if she hadn’t had insurance, she would have died because she needed to have a tumor removed that was connected to her anemia.

“I would have died. The tumor was causing me to bleed, and it was making my blood count really low,” she told The Hill in an interview. “If I had lost my insurance at that time, how was I going to be able to go to the doctor to even know what was going on with me? Those appointments were $300 and $400 alone.”

Officially, Arkansas’s job requirements removed about 18,000 people from health insurance, but due to the state’s selective tracking of statistics, Hawkins said the actual number is probably far higher.

Regardless of how many Arkansans ended up losing their insurance, the sum represents a tiny portion of the total number of Americans who will lose their insurance.

Republicans and some Democrats have defended work requirements by arguing that they force recipients of government benefits to work harder in exchange for higher pay, but research from Harvard T.H. Chan School of Public Health has shown that in reality, the Arkansas requirements did not help people find jobs.

“Work requirements did not increase employment over eighteen months of follow-up,” the researchers concluded, adding that “awareness of the work requirements remained poor, with more than 70 percent of Arkansans unsure whether the policy was in effect.”

The proposed law is viewed by many researchers as simply a mechanism by which to remove people from government programs and not as a way to encourage people to earn a wage.

As such, the requirements should not be thought of as a “work requirement” so much as a “paperwork requirement,” they say.

“If the goal is to get people who can work into work, the way that this goes about that is saying, ‘Prove it.’ That’s very different from checking on them using the excellent administrative data that many state governments already have,” said Kathryn Anne Edwards, an economist and public policy analyst, in an interview with The Hill.

“It puts the burden of proof on them, and one result that we know this will have is that a lot of people will lose benefits,” Edwards said.

This could be a good outcome if the onerous paperwork prompts Medicaid recipients to find a high-earning job that then makes them ineligible for the program.

“But that is a very rosy picture that we don’t have any evidence to support,” Edwards said. “Instead, it results in people losing benefits.”

The GOP legislation passed in the House does “whenever possible, prioritize the utilization of existing databases or other verification measures” over formally reported work requirements, but experts say this language has little chance of being realized practically.

“Outside of substantial efforts to regularize federal databases to be able to talk to each other, work requirements are going to continue to function as they have in the past,” said Matt Darling, an employment policy fellow at the Niskanen Center, a Washington think tank.

Darling argued that work requirements are a “program that fails to get people into work while dropping people from Medicaid if they do not fill out the paperwork.”

Following the passage of large tax cut legislation under the previous two Republican administrations that significantly increased the U.S. debt, the Republican Party has turned its attention to welfare and national health insurance programs.

After the enhanced child tax credit was repealed in 2022, which helped millions of American children escape poverty, policy analysts are now more commonly pointing out the lack of political repercussions for focusing on programs for low-income and working-class Americans.

“The poverty rate has remained essentially unchanged for the past 40 years, so I don’t know if [targeting the poor] is necessarily a bad political strategy,” Edwards said.

“It’s not like I can say that there are a lot of bad political outcomes for people who don’t help poor people. We do it all the time.”

Despite frequently asserting that a U.S. debt default would bring about an economic disaster, the Biden administration hasn’t taken any legal solutions seriously.

The White House has so far focused on negotiations with House Republicans, despite progressive Democratic members pleading with Biden to defy Republican demands for changes to programs that aid low-income Americans.

These options include suggestions to print more money with the sole intent of canceling or lowering the U.S. debt level below its present maximum level.

Biden has stated his willingness to rely on the Constitution’s 14th Amendment, although American courts and international financial markets might not be amenable to such workarounds.

Written by PH

Leave a Reply

Your email address will not be published. Required fields are marked *

South Africa: Zoleka Mandela Returns Home After 8 Nights in Hospital

Branson’s Robbins Insurance Group Merges with Arkansas Firm