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A Proposed Work Requirement Exemption in Michigan Is Mired in Controversy

Critics say the legislation being put forth in Michigan will unfairly benefit rural white communities over the more urban black areas—but is that true?

A controversial state bill in Michigan would exempt certain counties from new work requirements proposed for recipients of Medicaid. On paper, the bill looks like it would rescue rural white constituents from work requirements while imposing the new standards on their urban black counterparts. Yet the bill's likely effect may be vastly overstated—a marker of the uncertainty surrounding Republican efforts to tighten welfare.

Just last month, Michigan's senate passed a law that would require Medicaid recipients to prove that they work 29 hours a week in order to receive their benefits going forward. The state's house is now weighing the bill. So far, only four states have won approval for similar waivers from the Centers for Medicare & Medicaid Services—Kentucky, Indiana, Arkansas, and New Hampshire—and none of these plans have gone into effect yet.

While the Michigan bill allows exemptions from work requirements for some regardless of location—including people who are pregnant; over 64; who have a disability; or are caretakers for a dependent with a disability or a family member under the age of six—the new bill before the Michigan state legislature would also waive these work requirements for anyone in counties with an unemployment rate over 8.5 percent.

There's a disparity here, as critics have noted. Michigan's high-unemployment counties are mostly rural and mostly white—whereas a city such as Detroit, a place with a high concentration of black poverty, is nestled in a larger municipality, Wayne County, with a low overall unemployment rate. Advantage: poor whites.

"Rural residents of up-north counties with high unemployment are protected; urban Michiganders who live in high-unemployment cities in more prosperous counties are left to twist," writes Nancy Kaffer, a columnist for the Detroit Free Press.

Her outrage is correctly placed. Michigan Senator Wayne Schmidt appears to have designed a bill to narrowly protect the interests of Cheybogan County, which he represents, and other counties like it. Here's the thing though: the exemptions won't even protect that many poor whites. While this bill may be designed to benefit a select group with a powerful patron, work requirements will place an additional burden on most of Michigan's struggling welfare class, regardless of race or ethnicity.

"Even though there are concerns that there are racially disparate impacts of this exemption policy, it's still the case that those who are white and who live in rural counties in Michigan will also be impacted dramatically by the work requirement," says Matt Broaddus, senior research analyst for the Center on Budget and Policy Priorities.

As of March, there were just 17 counties in Michigan (out of 83 total) with an unemployment rate above 8.5 percent, the exemption cutoff. Those counties are rural, predominantly white counties clustered in northern Michigan and the Upper Peninsula. According to Broaddus, only about 1 to 3 percent of the Medicaid enrollees who would be subject to the work requirements live in the counties that would benefit from this proposed exemption.

Put another way: The Michigan House Fiscal Agency predicts that imposing minimum work requirements for Michigan's one million non-elderly adult Medicaid beneficiaries may result in some 150,000 enrollees losing their coverage. Schmidt's carveout for rural upstate (white) counties would preserve coverage for some folks, but it's ultimately very few people—just 1,000 to 3,000 enrollees across all 17 of these affected counties.

As the Washington Post explored last week, Michigan's exemption would overwhelmingly benefit white enrollees. But the absolute benefit would be marginal. While Michigan's exemption bill may be discriminatory, as written, it's unlikely to save very many white Michiganders.

This just goes to show how far the renewed conservative welfare reform push will reach. Michigan is one of a number of states considering Medicaid waivers after the Trump administration gave work requirements a green light in January. Enrollees in those states may run into the same problems that welfare recipients have faced in other programs. Demonstrating an average of 20 or 30 hours of work a week can be a heavy burden, even for people with jobs, especially those working in low-wage shift positions with unsteady schedules. Failure to simply get all the proper paperwork together could result in a person losing their Medicaid coverage in some states.

This is to say nothing of people who just can't find work. Even when unemployment is low, it isn't low everywhere, and, furthermore, the population of working-age, able-bodied adults without dependents isn't evenly distributed. The United States Bureau of Labor Statistics' Local Area Unemployment Statistics shows that Detroit city—as opposed to Wayne County—had an unemployment rate of 9.3 percent in 2017. Michigan's exemption bill caught heat for shifting the burden onto blacks, but due to demographics and geography, it doesn't lift much burden off whites.

Exemptions are a fraught issue for welfare programs. Under the current law, for example, there's a time limit for how long an able-bodied adult not living with children can receive benefits under the Supplemental Nutrition Assistance Program while unemployed: three months within any three-year period. To get food beyond this time limit, SNAP recipients need to prove that they're working at least 20 hours per week. However, states can receive a waiver from these work requirements—and most states do.

According to the right-leaning Franklin Center for Government & Public Integrity, Michigan waived these work requirements for 69 counties this year. In all but 10 counties, the state extended the waiver for work requirements. Michigan's been doing it that way since 2002. So the state hasn't imposed federal work requirements for SNAP for 15 years. Yet SNAP spending is down: Michigan posted a year-over-year dip of 28 percent in February of 2018, the steepest decline of any state. This appears commensurate with the state's decline in unemployment: Michigan's overall unemployment rate has dropped to under 5 percent from a Great Recession high of nearly 15 percent.

Even as states are introducing work requirements for Medicaid, the federal government is trying to ramp up work requirements for housing aid and food benefits. Researchers at the Urban Institute find that new restrictions and penalties in the proposed Farm Bill would impose work requirements on 7.9 million SNAP recipients; of this group, 5.2 million people (66 percent) would not make the cut based on current work patterns. State-level exemptions might help some or even many of these people, but exemptions are iffy: subject to vague wording, tedious approvals, and racial disparities.

It's not clear what problem work requirements are supposed to solve in 2018. Across Michigan, rates for people going without health care have dropped dramatically since the adoption of Obamacare and Medicaid expansion. The uninsured rates for people under 65 has fallen by close to half in every single county in the state. If and when Michigan imposes work requirements for Medicaid recipients, those uninsured rates are bound to rise. A bill that carves out an exemption for favored, mostly white populations still may not be enough to protect them.

This story originally appeared on CityLab, an editorial partner site. Subscribe to CityLab's newsletters and follow CityLab on Facebook and Twitter.