Blaming The Victim: West Virginia’s Flirtation With Medicaid Work Requirements

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It was my intention when launching this blog to support economic policies in West Virginia that actually spread prosperity to all citizens. The wealthy don’t seem to need help ensuring they get a big plate full at the prosperity table. It is the less fortunate who need help. But in this long Republican winter, avoiding policies that hurt the less fortunate is really a full time job.

Two ideas popular in West Virginia and the nation today fuel this problem. First is the Koch-funded libertarian idea that any expansion of public benefits is a threat to the “liberty” of those who are taxed to pay for it. This is well-documented in Nancy MacLean’s 2017 book Democracy in Chains. Second is the populist notion that people who receive public benefits are somehow lazy and morally at fault for their situation. Both of these factors are on display in the current debate about whether to add work requirements for Medicaid benefits.

Medicaid is a jointly funded federal and state program that helps several categories of low income and disabled people with medical costs. As of 2017, Medicaid provided healthcare coverage to 74 million nationwide (over 23% of the population). Some of the covered categories include children in low-income families, pregnant women, parents of Medicaid-eligible children who meet certain income requirements, and low-income seniors.

Obamacare extended Medicaid eligibility to all U.S. citizens and legal residents with income up to 138% of the federal poverty line, including for the first time adults without dependent children. But as a result of a Supreme Court ruling, states were not required to adopt this expansion in order to receive federal Medicaid funding for previously covered groups. Given its large poor population, West Virginia wisely opted to extend coverage. About 170,000 additional West Virginians became eligible under Medicaid expansion, roughly 9% of the state’s population.

On January 11, 2018, the landscape changed. The Director of the federal Centers for Medicare and Medicaid Services (CMS) issued a letter to all state Medicaid directors inviting them to apply for a waiver that would allow states to require participation in work and other community engagement as a condition for Medicaid eligibility. The policy change is described as “designed to assist states in their efforts to improve Medicaid enrollee health and well-being through incentivizing work and community engagement.” Yes, you read that right. These bureaucrats are asserting that work will make you healthy. They cite studies that link unemployment with depression. Of course, they have it totally backwards – being healthy will enable you to work.

I am inclined to think that CMS’ explanation is a cynical effort to avoid the legal challenges to Medicaid work requirements that have already begun. In the first place, approving work requirement waivers is an about-face – several states attempted this in the past but were denied. They were denied because work requirements for eligibility are contrary to Medicaid’s stated purpose to provide comprehensive healthcare coverage for people below state income thresholds. Administrative agencies cannot lawfully rewrite a statute through adding eligibility requirements that advance other goals (limiting benefits to the “deserving poor”) that are contrary to the purpose of the law. CMS operatives know this, which explains their absurd effort to link work requirements with health.

At the urging of Republican legislators, West Virginia’s Department of Health and Human Resources is now considering work requirements for Medicaid recipients. According to Jeremiah Samples, Deputy Secretary of DHHR, this effort would focus on “able-bodied” people:

We’re trying to empower folks to get out of the system. At the end of the day, the best thing we can do at DHHR for our able-bodied population is to get them into the workforce, without question.

Truth be told, any such requirements would expel recipients from the system, not “empower” them to leave. This is a stick not a carrot. For Medicaid expansion states like West Virginia, any work requirements will have the (intended) effect of reducing the recipient population irrespective of whether those removed remain below the state income threshold.

How would this happen? According to Mr. Samples, the DHHR is reviewing how other states plan to add work requirements. Kentucky’s waiver was the first to be approved by CMS. The Kentucky plan calls for reporting by the recipient every 30 days to verify that he or she is working or involved in some other activity approved by the authorities. Kentucky will disenroll recipients from Medicaid for up to six months if they fail to report changes in income or work status.  Beyond the sheer hassle to the recipient and the possibility of inadvertent noncompliance, this would be yet another layer of red tape and opportunity for error. It would be a system the sole purpose for which is to snag and remove Medicaid recipients who do not repeatedly, month after month, prove their eligibility and worthiness. An aide to Kentucky Governor Blevins says that he expects 95,000 recipients to be removed from Medicaid benefits within five years.

Getting people off benefit rolls and onto employment rolls is a great idea. But West Virginia can’t do this by denying people healthcare. There are several reasons why an “able-bodied” person might be in need of Medicaid that have nothing to do with laziness. A shortage of jobs is one. Being between jobs for over 30 days is another. A mismatch between job requirements and a worker’s skill might be another. Opioid dependency might be involved. In an excellent editorial published on January 25, 2018, The Charleston Gazette put it this way:

How does interruption in coverage improve anything? Or is it just an exercise for the righteous . . . to feel better about themselves? ‘Must work for your healthcare,’ might be a great policy in the perfect imaginary world where ideologists live, but it fails to acknowledge the real circumstances of life in most of West Virginia, both town and country. No doubt that is by design. If people who never liked the Medicaid expansion can dress up their ‘solutions’ as getting tough on the poor and lazy, it sells better than if it is more accurately described as kicking the most vulnerable West Virginia workers, or potential workers.

Eighteen states declined to accept Medicaid expansion funds despite the needs of their populations. This group includes every state in the old Confederacy except Arkansas and Louisiana. But one unintended consequence of the present willingness of CMS to approve Medicaid work requirements is that several of these non-expansion states are now considering participation in the expansion. This may have the ultimate effect of increasing the Medicaid rolls nationwide. But it is a development that will not help expansion states like West Virginia.

West Virginia’s New Voter ID Law and the Myth of Voter Fraud

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Effective on January 1, 2018, West Virginia law now requires a prospective voter to present a valid identifying document to a poll clerk. The clerk will then verify that the name on the document conforms to the individual’s voter registration record. If the identifying document has a photograph, the poll clerk will determine that the photograph is “truly an image of the person presenting the document.” This new law is similar to voter ID laws passed by state legislatures around the country at the urging of Republicans. But voter impersonation fraud – the only possible fraud affected by the new law — is virtually non-existent in the United States and no cases have been identified in West Virginia.

I believe that West Virginia’s new voter ID law will have the consequences – perhaps intended – of complicating the voting process, intimidating some potential voters, and reducing the numbers of voters from the poor and less-educated ranks of our state. It will slow the voting process and create lines where there haven’t been lines, thereby frustrating and deterring voters. If these predictions are correct, the new law will undermine voter confidence and participation. But there are benign aspects of the law that should be acknowledged.

There are eighteen categories of documents that may be used to establish identity, not all of which are photo IDs. Most people will have at least one of them. If not, a voter can be accompanied to the polls by someone who can vouch for her identity. If none of this works the voter will be required to execute an affidavit stating his identity and that he is the person listed in the precinct voter records. He will then will be permitted to vote a provisional ballot. The question of his identity will be resolved by election officials later. The provisional voter will not be required to take any further action to have his vote counted. In theory, anyway, no one will be turned away from the polls.

West Virginia’s new law is less restrictive than the laws passed in many states. Seventeen states require a photo ID, which African-Americans and Hispanics are statistically less likely to have. In ten states voters who do not have the required ID may vote a provisional ballot but must take some action after election day, such as returning to the polls with a qualifying ID, for the provisional ballot to be counted. These strict requirements have been challenged in court, with some notable successes so far.

West Virginia’s new voter ID law was passed in 2016. To the surprise of many, an amendment proposing automatic voter registration when an individual interacts in some way with the Division of Motor Vehicles also passed. At that time only two other states – Oregon and California – had automatic voter registration. Automatic voter registration is already showing clear benefits in Oregon. Within two months of implementation more than 15,500 Oregonians were registered — a four-fold increase. Thirty percent of the new registration records transferred from the Oregon DMV to election officials reflected eligible but previously unregistered citizens.

Saira BlairWhen the Republican legislators who sponsored the voter ID law realized that it might actually increase voter registration, they began to backpedal. During the 2017 legislature, Del. Saira Blair (R-Berkeley) proposed an unsuccessful amendment to the original bill that would have permitted voting only upon showing a photo ID. Blair, who is 21 years of age, couldn’t cite a single case of voter fraud but sponsored the amendment because she had heard anecdotes. She said “without photo identification, it’s hard to stop fraud, and it’s also nearly impossible to prove it took place.” As Supreme Court Justice David Souter quipped, this is like arguing that “the man who isn’t there is hard to spot.” Really, isn’t there anyone more mature than Blair – Republican or Democrat – who is willing to run for this seat?

It is no wonder that Del. Blair could cite no cases of voter impersonation fraud in West Virginia, because there just aren’t any. A comprehensive study of allegations of impersonation fraud (not just prosecutions) was begun in 2008 by Justin Levitt, a professor at Loyola Law School in Los Angeles.  As of 2014 he had logged only 31 incidents nationwide out of over one billion ballots cast.  None of these were in West Virginia. And keep in mind that impersonation fraud is the only kind of fraud the new West Virginia voter ID law is designed to prevent.

Impersonation fraud is exceedingly rare for several reasons. First, it is risky to the fraudulent voter. He must announce himself in front of poll workers, who may know who he actually is or the person he claims to be.  Second, the penalty for fraudulent impersonation of a voter is severe – it is a felony. Third, a fraudulent impersonation affects only one vote. The risks and rewards just do not encourage impersonation fraud.

West Virginia’s former system of voter identification required the voter to announce his name in front of poll workers, sign a register and have poll workers compare that signature to the one in voter registration records. This system worked exceedingly well to deter impersonation fraud before the enactment of the new voter ID law. One wonders about the true motivation for adopting this legislation – it certainly wasn’t based on a problem that needed to be fixed.

In her excellent 2010 book The Myth of Voter Fraud, Lorraine Minnite concludes that

The best facts we can gather to assess the magnitude of the alleged problem of voter fraud show that, although millions of people cast ballots every year, almost no one knowingly and willfully casts an illegal vote in the United States today.

Instead, voter fraud is a politically constructed myth. It is used to support measures that suppress the opposition party’s votes because this is more effective and less expensive than mobilizing new voters who may end up destabilizing a party’s own coalition.

Voting is a constitutional right. So it is unconstitutional to condition the exercise of that right on the payment of a poll tax. However, current Supreme Court law does not extend this principle to universally applicable voter ID requirements, such as requiring a photo ID, even where they burden the right to vote for some groups like the elderly, the homeless and the disabled. Nevertheless the legislative motivation for adopting such requirements can render them unconstitutional. North Carolina’s strict voter ID law was struck down by the Fourth Circuit Court of Appeals (also with jurisdiction over West Virginia) because it was surgically designed to reduce African-American voting. There is no similar legal challenge to West Virginia’s new law.

My advice to West Virginia voters: get your IDs ready, be prepared to stand in line, and be sure to thank the Republicans for their handiwork in 2018.

The Rich Benefit Bigly From Trump’s Tax Reform

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The Tax Cuts and Jobs Act (TCJA) has added mightily to the already serious income and wealth inequality in America. Yet our state’s Republican representatives in Congress seem oblivious that most people in this state are poor relative to the rest of the country. They have boasted about what amounts to the crumbs on the table that middle and lower income West Virginians gain from this Act. For example, Rep. Alex Mooney, who represents much of the Panhandle in Congress, announced that he voted for “tax cuts for all West Virginians.” Always obsequious when it comes to the White House, Mooney said “President Donald Trump has been a true leader on delivering tax relief for all Americans and I am looking forward to continuing to work with him to create more jobs and to keep our economy growing.” There is no other way to put it — this emphasis on the illusory benefits enjoyed by the broad middle of our society is just willfully deceptive. The true winners under the TCJA are the rich, who will benefit at the expense of the rest of us.

Even the frequently touted tax reductions for lower and middle income taxpayers are not intended to be permanent. These will decline over the next eight years and ultimately expire. Sen. Shelley Moore Capito argued in the December 27, 2017, Spirit of Jefferson that the new law doubles the standard deduction to $24,000 for couples. But she failed to mention that this increase also expires in 2025. Furthermore, she didn’t even try to defend some of the law’s permanent features, which benefit the wealthy. These are the $1.5 trillion tax cuts for corporations, which will do nothing but increase the value of corporate stock in the hands of the wealthy, and the repeal of the Affordable Care Act’s individual mandate. The repeal of the mandate will generate $53 billion in annual savings by 2027, paying for about one-third (about 4.7 percentage points) of the bill’s 14-percentage-point permanent cut in the corporate rate. But it will leave millions more uninsured and raise premium rates for many others.

Here are three additional key ways in which the TCJA benefits the rich at the expense of the rest of us:

Distributing Tax Cuts Disproportionately to the Rich. The Tax Policy Center, a joint effort by the Brookings Institution and the Urban Institute, put it this way: “In general, higher income households receive larger average tax cuts as a percentage of after-tax income, with the largest cuts as a share of income going to taxpayers in the 95th to 99th percentiles of the income distribution.” This result will clearly play out in West Virginia.

Tax Benefits

Doubling the Estate Tax Exemption. The TCJA doubles the exemption from tax on estates valued from $11 million per couple to $22 million per couple. Doubling the exemption reduces the share of estates facing tax from 0.2 percent to 0.07 percent, leaving only 1,800 taxable estates nationwide. It is hard to understand why this tax change was so important — unless satisfying rich donors is considered. The estate tax rate is only 17%, far less than on ordinary income for this group of taxpayers. Still the tax exemption will be worth on average $4.4 million to those upper-end estates who will now be exempt. To put this in perspective, $4.4 million is about what it would cost to give 1,100 Pell grants to low income students.

Creating a Tax Break for “Pass-Through” Income. Although the corporate tax rate is reduced by 14 points, this benefit mainly applies to large corporations.  Many small corporations and limited liability entities account for business income by passing it through to the individual owner. Trust me on this, most of these business owners are not among the struggling taxpayers in this country. The corporate tax rate doesn’t apply to passed-through business income. Instead, the individual tax rate for that taxpayer would apply. It was not enough that the individual tax rates will be reduced, the TCJA also creates a special new tax benefit for pass-through business income. The final TCJA allows small business owners to deduct 20% of their passed-through business income.

I get it that current Republican ideology is interested in directing policy benefits to those in society they call the “makers,” while being far less concerned about everyone else whom they label the “takers.” The TCJA is a perfect example of how this works, even though Republican politicians continue to argue falsely that the beneficiaries of this law are the middle class. To some extent, the horse is out of the barn — this bad tax law passed warts and all. But we cannot let this go. At every opportunity in the run-up to the 2018 mid-term elections and then on to 2020, we need to keep this issue at the front of the debate.