Alternative Headline: Red Tape Jeopardizes Medicaid
[MM Curator Summary]: Trump’s tax bill enforcing new paperwork and semiannual eligibility checks could strip millions of eligible Americans—including 180,000 Missourians—of health care.
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This week, Senators have started their consideration of President Trump’s big tax bill, which was passed by the U.S. House of Representatives in May.
Missouri U.S. Sen. Josh Hawley was clear in his priorities for the legislation, writing in early May that “slashing health insurance for the working poor is … both morally wrong and politically suicidal.” President Donald Trump was blunter, telling lawmakers not to “f**k around with Medicaid.”
The bill passed by the House, does not pass their test – it does not, as Trump and Hawley claim, contain “NO MEDICAID BENEFIT CUTS.” Instead, it will kick millions of people off of Medicaid by piling on new red tape. And it will bury under-resourced state Medicaid offices in so much paperwork that they will be at risk of collapse.
Together, these forces will mean that eligible Americans in Missouri and around the country will not have access to their Medicaid. Many will be left without health care as they prepare to bring a child into the world, face a new cancer diagnosis, or manage a chronic illness. In other words, if this bill passes, Medicaid will be cut for Missourians when they most need it.
The House bill imposes new bureaucratic requirements on Medicaid beneficiaries, forcing them to file piles of new paperwork about their jobs, schools, disabilities, or sick family members to keep the health insurance they are already eligible for under the law.
These so-called “work requirements” do not boost employment as advertised – experiments in other states have repeatedly failed to do so. This is, in part, because the vast majority of Medicaid beneficiaries who can work already do. That makes sense – you can’t buy food and pay rent with a health insurance card.
The reason this bill reduces the cost of Medicaid by billions of dollars is that it assumes regular people will get tangled in the red tape of proving they are eligible for Medicaid. Experts project that over 10 million eligible people will lose their health care because of all the paperwork, including over 180,000 Missourians.
But we believe that even this prognosis is too optimistic. Most analyses only consider the difficulty that people will have proving that they are entitled to Medicaid under the law, but not the difficulty states will have in administering the new paperwork requirements.
We have spent the last several years modernizing the systems that deliver benefits to millions of Americans, including Medicaid. What we have learned is that state Medicaid systems, including MO HealthNet, are already on the brink – and lack the resources and resilience to take on the onslaught of requirements and deadlines about to hit them. Trump’s tax legislation, the new requirements it imposes, and the lightning-fast timeline it requires, are setting Medicaid up for a collapse.
Here’s how it could play out. States are responsible for determining Medicaid eligibility. They allow people to enroll in one of four ways – by mailing in documents, enrolling online, applying over the phone, or walking into a physical office. Each of these pathways is already at a tipping point.
Medicaid agencies around the country have staff vacancies as high as 30 percent, which means there are already too few workers to open mail, process applications, answer the phones, and staff walk-in centers. As a result, even under the current system, eligible people can see their Medicaid lapse because their paperwork is not processed in time.
Missourians have recent experience with the effects of an overburdened Medicaid system. By law, Medicaid applications are supposed to be processed in 45 days, but as of last May, Missouri missed that deadline 72% of the time – the worst record in the nation – causing the federal government to step in to help for the second time in two years. The wait time on the Medicaid call center was 56 minutes in February 2024.
The House bill will immediately explode the workload for state Medicaid offices. Medicaid beneficiaries will need to prove their eligibility twice a year instead of annually.
And then it piles on the new paperwork rules. Missouri will have to figure out how to verify that a beneficiary is working, going to school, or meeting the new requirements some other way. They’ll need to send out millions of paper notices, emails, and text messages to notify enrollees about the changes and train staff to handle the deluge of documents that will flood in. Just hours before the bill passed, Congress quietly moved up the deadline for states to make these changes, requiring implementation by the end of 2026 or sooner.
And all this new bureaucracy rests on technology that is already failing. We’ve seen just how broken states’ health care infrastructure is – Luke helped uncover state software errors that improperly terminated coverage for nearly 500,000 eligible kids across 29 states after the pandemic. The added strain imposed by this legislation will crash websites, jam call centers, and trigger even more software errors – trapping working people in the chaos.
Under these conditions, failure isn’t just likely — it’s inevitable.
We don’t need to guess at how this plays out. When Arkansas tried to implement Medicaid work requirements in 2018 the results were disastrous. People received confusing instructions about how to prove they were working and many never knew about the requirement. The state’s website repeatedly crashed. In the end, more than 18,000 people lost coverage, employment rates did not budge, and the state wasted $26 million on a failed experiment.
In some states, that will mean lines around the block at overwhelmed county offices. In others, dropped calls, system outages, and piles of unprocessed renewals. These challenges compound. When the website breaks, you call. When your call drops, you drive to the office. Attrition will spike as the overmatched Medicaid staff are increasingly under siege, overtime is mandatory, and time off is cancelled. Smaller and smaller numbers of staff will bear larger and larger workloads until the system collapses.
And, eligible Americans – working adults, kids, seniors, students, and adults with illnesses and disabilities – will still have no Medicaid. Hospitals will provide more uncompensated coverage, putting some – especially rural hospitals and children’s hospitals – at risk of failure.
This bill sets up state Medicaid agencies to fail at their most basic task – ensuring that eligible people have health insurance. It doesn’t matter to a pregnant mom why her Medicaid is cut, she is going to miss prenatal visits and skip her toddler’s check-up. If Hawley wants to stand up for over one million Missourians who rely on Medicaid, he should oppose this bill.
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