Making people work for their health care

The Economist this week carries an article and an editorial piece about what they are calling “The Arkansas experiment“.  In January 2018 President Trump announced that there would be federal waivers to allow states to introduce a test of ‘community engagement’ for entitlement to Medicaid.  Medicaid is the means-tested system offering support in the US for health care for people of working age; ‘community engagement’ means, more or less, a work test, requiring people to be working, ‘volunteering’, studying or responsible.  Arkansas is so far the only state to implement this, but the Economist notes that 14 other states have applied for similar waivers.

The Economist expresses some doubt about the policy: it is complicated, engagement is difficult to prove in a world of precarious work, and incentivisation is perverse.  The main thing that sick people need before they can work is to be healthy.  But they start with a rather questionable statement of principle:  “The theory behind tying cash benefits to work requirements is sound. Asking people to do something in exchange offer a payment can build political support for welfare programmes”.    Conditionality may well be the price that politicians have to offer to get a programme accepted; that’s not the same as saying that conditionality leads to greater support.  If anything, the polities where people are most determined to impose conditions on the poor are also usually the ones where support is most tenuous.

The “theory” behind work requirements, if it deserves to be called a theory,  is highly questionable.  ‘Activation’ policies, which are supposed to prod unemployed people into work, are based on a series of false premises – that benefits used to  promote unemployment ‘passively’, that the answer to unemployment is more vigorous job-seeking, and that people will not move into work without a spur.  Empirically, activation doesn’t improve job matching; there is some evidence that it can make lead to mismatches, or even slow down the rate at which people move in to employment.  ‘Activation’ for people who are sick – a policy we’re now seeing in the UK, reflected in the treatment of sick people on ESA and Universal Credit – is worse still.  People on these benefits have to ready themselves for work nevertheless – sickness is no excuse.  It’s only a small step from there to the extension of the same principle to health care.  Depression?  Ulcerative colitis?  Congestive heart failure?  Pull yourself together!