He built Michigan’s Medicaid work requirement system. Now he’s warning other states

It was March 2020, and Robert Gordon was about to kick some 80,000 people off health insurance.

As the Michigan state health director, he had just spent the past year, and some $30 million in state tax dollars, trying to avoid doing that very thing.

Gordon was a Democrat, a veteran of the Obama administration, and he didn’t want people to lose the coverage they had recently gained through the Affordable Care Act.

But Gordon and his boss, Democratic governor Gretchen Whitmer, had reluctantly inherited a law passed two years earlier, when Republicans led the state. And that law mandated that Michigan institute work requirements for Medicaid on January 1, 2020.

Gordon and his team managed to determine that most enrollees were already meeting the law’s requirements, either because they were already working or had an exemption. Thousands more reported their status through the newly-built phone and online systems.

But even so, estimates suggested between 80,000 and 100,000 Michiganders were going to be booted off the rolls within the year.

“That’s the population of the city of Flint who were on track to lose their insurance,” said Gordon, who led the state health department until 2021. “We’re implementing this about as well as this thing can be implemented, and it is still going to be pretty catastrophic.”

The new tax-and-spending law signed by President Trump in July will mandate a vast expansion of Medicaid work requirements to most states.

These systems will lead to 4.8 million more people becoming uninsured by 2034, according to estimates from the Congressional Budget Office.

The law applies to 40 states and the District of Columbia, because they expanded Medicaid in recent years to cover more working-age adults.

About 18 million people will be affected once the work mandate is fully implemented nationally. Starting in 2027, they will need to prove they’re working, volunteering or getting job training at least 80 hours a month, in order to keep their coverage.

Republicans say this is a common-sense way to weed out “freeloaders.” Democrats argue that’s just political cover for slashing a program that saved some 27,000 lives between 2010 (when the Affordable Care Act passed) and 2022.

The number of people who lose coverage, either temporarily or permanently, could vary fairly widely by state, depending on how each state implements and maintains their reporting systems.

Michigan’s experience illustrates how challenging it can be to stop large numbers of people from inadvertently losing coverage, even when leaders try their best to prevent that.

“We were very committed to implementing a law that we didn’t agree with, in a way that reduced the number of people who lost insurance, just because the government screwed something up,” Gordon said.

A year’s worth of high-stakes work 

In 2013, then-Governor Rick Snyder, a Republican, waged a fierce battle within his own party to expand Michigan’s Medicaid program.

To Snyder, it was an opportunity to simultaneously save money and expand access: by slashing the rate of uninsured Michiganders almost in half, the state could reduce the burden of uncompensated care on the health system, and boost the economy by improving the physical health of the workforce.

But opponents saw it as an expansion of “Obamacare” that would shift massive new costs onto federal taxpayers. Work requirements became a point of compromise, and a way for Snyder to mollify some of that opposition.

From a coverage perspective, Michigan’s expansion of Medicaid was a success. Low-income adults signed up, ballooning new enrollment beyond what even supporters had initially estimated.

By 2019, there were nearly 700,000 new Medicaid recipients in Michigan, and the state was responsible for an increasing share of their health care costs (Medicaid is paid for jointly by states and the federal government.)

Fiscal hawks were worried. “It’s now become the largest budget problem in Michigan,” said Jarrett Skorup of the Mackinac Center for Public Policy, a free-market think tank

Snyder signed the bill creating the 80-hour a month work requirements in 2018, but it wouldn’t go into effect until 2020, after he left office.

That left newly-elected Democratic Governor Whitmer’s administration holding the bag. She tapped Gordon, who’d held senior roles in the federal Office of Management and Budget and U.S. Department of Education during the Obama administration, to lead the sprawling state health department.

Gordon was terrified of Michigan becoming another Arkansas, which was the first state to implement work requirements, in 2018. The change led to more than 18,000 Arkansas residents losing their coverage.

People in Arkansas were disenrolled “because computers went down, because forms weren’t clear, because they just never heard about it,” Gordon said. “Maybe they got sicker, maybe they died because of this decision.”

If Michiganders lost coverage at the same rate as Arkansans, as many as 180,000 people would lose their health insurance within a year, according to one estimate.

Trying to make Medicaid work requirements…work 

In some ways, Michigan was actually better positioned than other states to implement work requirements, Gordon said. The unemployment rate was fairly low. And the state was already pretty good at collecting and tracking employment and wage data.

“If the state can figure out on its own, without having to ask you if you’re working, that’s great, because then you don’t have to do anything,” Gordon said. “You’re just exempted.”

Michigan eventually changed the law to allow people more time to report their work activities, and to automatically determine their compliance by cross-checking data from other assistance programs, like food assistance benefits.

To see if recipients were students, or had health-related exemptions, Gordon and his team also tried to capture data from community college enrollment and medical insurance claims.

Dozens of staffers reprogrammed the state’s outdated benefits enrollment portal, created full-time call centers, set up audit and appeals processes, hired compliance review teams, and trained hundreds of local organizers to provide tech and enrollment assistance.

Forms and letters alerting hundreds of thousands of enrollees to the new policy were redesigned to be attention-grabbing and easier to understand.

The sheer amount of effort and time required meant other public health efforts had to take a back seat, Gordon said. “Your first job is going to suffer, and that is a consequence of work requirements.”

In Michigan, black infant mortality rates were some of the highest in the nation. Thousands of people were still dying from overdoses.

Yet at the state health department, “all of the oxygen in the room was dedicated – almost all, I should say – to the work requirement implementation,” said Renuka Tipirneni, MD, MSc, who studies Michigan’s Medicaid expansion at the University of Michigan.

Even after all that work, Gordon and his team had no illusions the system they’d spent $30 million creating was flawless.

“There was a real sense that everyone was doing everything they could,” he said. But they still worried that “huge numbers of people were going to fall through the cracks. Because that’s just what happens with systems like this.”

A ‘waste’ of $30 million 

By the time the work requirements went into effect on January 1, 2020, the state had been able to determine that the vast majority of the nearly 700,000 Medicaid expansion recipients already met the work requirements, or were exempt.

That left about 100,000 people whose status was unknown, and therefore still had to actively go through the reporting process. By March, around 80,000 of those had failed to report, and were on track to eventually lose coverage.

On the one hand, it was a lower rate of coverage loss than Arkansas had. But it was still “an enormous number of people” who would have lost coverage, Gordon said.

Before that could happen, a federal court issued a ruling on March 4, 2020, blocking Michigan’s policies from going forward. That same day, Gordon was scheduled to testify before a Republican-led committee about how the rollout was going.

Instead, he found himself explaining to legislators that the state’s work requirements were essentially dead in the water, and that “we had, on the demand of the people holding the hearing, spent tens of millions of dollars for no purpose.”

Given how brief Michigan’s experiment with Medicaid work requirements actually was — only about three months of the policy being in effect, and no one actually losing coverage in the end — the Mackinac Center’s Skorup doesn’t think there are a lot of takeaways here about the real-life impacts of work requirements.

“If you have an administration that is not sold on these being necessary at all, then they’re more likely to drag their feet on implementing this, which is what I think [the Whitmer administration] did,” Skorup said.

Skorup remains concerned because Medicaid costs keep rising, with 2.6 million Michiganders (one in four residents) now covered by the program. In regards to the state budget, Skorup believes that “at this point, it’s crowding out teacher pay, it’s crowding out pensions, it’s crowding out roads.”

Supporters of Medicaid expansion say the program’s growth has actually benefited Michigan, pointing to research that Medicaid expansion actually helped boost employment and school enrollment, and was a net positive for the state financially.

Court ruling came down just days before state’s first COVID cases

Just days after the court ruling stopped work requirements in Michigan, officials announced the state’s first cases of COVID-19. The 80,000 Michiganders who might have lost Medicaid were spared, so their health coverage continued as the pandemic unfolded. Gordon continued as health director until 2021, when he resigned over “differences of opinion” with Whitmer about some pandemic restrictions.

These days, Gordon is experiencing a sense of deja vu, with new predictions showing as many as 500,000 Michiganders could lose coverage within the first year of mandated work requirements, according to state estimates.

“We would have a more honest and more efficient policy if Republicans just kick people off Medicaid,” he said.

That would be “incredibly harmful,” he said “But this thing they’re doing isn’t any less harmful. It’s just more wasteful administratively, and more confusing to everyone.”

This story comes from NPR’s health reporting partnership with Michigan Public and KFF Health News.