30 The EconomistJanuary 20th 2018
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ENTUCKY, a poor, rural state nostalgic
for coal, has never been quite sure of its
politics. For three years it was the darling of
Obamacare. Governor Steve Beshear, a
rare Appalachian Democrat, complied
with the reform by creating a statewide
health-insurance exchange and expanding
Medicaid (government-subsidised cover-
age for the poor and disabled). Between
2013 and 2015, uninsured rates for poor
adults fell from 40% to 9%—the biggest im-
provement in the country. But now that the
state is under new management—the Re-
publican governor, Matt Bevin (pictured
above), is a Tea Party favourite—Kentucky
may soon be notable in health-policy cir-
cles for a new reason: it wants to become
the first state in history to require some
Medicaid recipients to work.
Other states with Republican gover-
nors, including Indiana and Arkansas,
hope to follow. Before long, the health-care
safety nets in these states may look very
different from those in Democratic ones—
and indeed from those in other rich coun-
tries, where the poorest citizens receive
health care with no strings attached.
The Trump administration approved
Kentucky’s sweeping plan—which Mr Bev-
in called “the most transformational enti-
tlement reform...in a quarter of a cen-
tury”—on January 12th. The state will
receive an exemption from federal rules
governing how Medicaid works. Such
waivers are supposed to allow states to testalong with a time limit, on Temporary As-
sistance for Needy Families (TAN F), the re-
branded government scheme. The theory
was thatTAN F would serve the truly
needy, while the lazy would progress into
lives of self-sufficiency. For about a decade
this looked like a great success. The num-
ber of claimants plunged by 50% in four
years. Over the longer term, the results
looked less good. Short-term increases in
employment did not seem to translate into
marked improvements in income.
Requiring work, volunteering or study
in exchange for Medicaid has never been
attempted before, though. And there is
some evidence that, rather than discourag-
ing work as many Republicans claim, Med-
icaid incentivises toil. After Ohio expand-
ed its Medicaid programme, three out of
every four unemployed enrollees said that
gettingcoverage had made it easier to seek
work. International comparisons do not
support Republicans’ argument, either.
Many countries with universal access to
health care have a higher proportion of
working-age people in employment than
America does. (A likelier problem is that
taking away benefits as people earn more
disincentivises job advancement.)
Republicans have sought to shrink wel-
fare programmes for decades, often saying
that they are unaffordable. But their rea-
sons for reforming Medicaid seem to be
more about morality than money. Mr Bev-
in says that the savings made do not mat-
ter. Hisoffice adds thatthe rationale be-
hind the plan was—confusingly—to
promote “better health outcomes”. A
spokesman for Rand Paul, Kentucky’s lib-
ertarian Republican senator, says that
“work should not be seen as a punish-
ment, but as an opportunity”. Paul Ryan,
the House Speaker, has warned of the dan-
gers of turning the safety-net into “a ham-
mock that lulls able-bodied people to livesexperimental programmes “while preserv-
ing or enhancing the quality of care fur-
nished”. Yet Kentucky expects its plan to re-
duce the number of Medicaid recipients by
15%, suggesting that the administration is
bending the rules a little.The third freedom
When the reform comes into force in July,
able-bodied adults enrolled in Medicaid
risk losing their insurance if they do not ful-
fil a “community engagement” require-
ment—20 hours of work, job-seeking or
volunteering each week. A thicket of regu-
lations will determine precisely who must
comply; those in school or taking care of a
family member will be exempt. The state
expects the new mandate to affect 350,000
Kentuckians, half of whom already have
jobs, and estimates that itwill shed 95,000
from its Medicaid programme. The impact
could be higher because prospective en-
rollees will be deterred by the sheer com-
plexity of the new rules, argues Sara Ro-
senbaum of George Washington
University. Already, people need a lot of
nudging to enroll. Of the 285,000 non-el-
derly Kentuckians who are still uninsured,
43% are actually eligible for Medicaid but
have not signed up.
Adding work requirements to Ameri-
ca’s safety net is not a new idea. The previ-
ous overhaul of America’s cash-benefits
programme, in 1996 under President Bill
Clinton, instituted a work requirement,The safety netWorking for it
WASHINGTON, DC
Some states will soon attach conditions to health insurance for the poorUnited States
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32 What Amazon does to wages
33 Kansas and Missouri
33 The Iran nuclear agreement
34 Hawaii and nuclear fears
35 Lexington: Stranger danger