Commentary, NC Budget and Tax Center

There’s no way to fix Medicaid work reporting requirements

The conversation about expanding Medicaid in North Carolina has been growing, but proposals to make the program less accessible and less efficient are still casting a shadow. Work-reporting requirements are an unnecessary and harmful barrier that would keep North Carolinians from accessing medical coverage.

Evidence — from across the nation and from other programs like food assistance — have demonstrated that not only do requirements to report work activities target people who have difficultly navigating administrative red tape, but they also punish people who are working but may not have a reliable work schedule or steady employment.

A report from the Center on Budget and Policy Priorities details the lessons learned from seven states that expanded Medicaid but chose to restrict access through work-reporting requirements. They found that even when policymakers attempted “fix” work reporting rules, the unintended consequences left far too many eligible people without health coverage:

“Medicaid work requirements can’t be fixed: other states that implement work requirements will see the same unintended consequences as Arkansas is experiencing. After evaluating the initial data from Arkansas, the non-partisan Medicaid and CHIP Payment and Access Commission recommended that the Administration immediately pause on allowing any more people to lose coverage in Arkansas as well as on approving work requirements in other states.  Both the Trump Administration and state policymakers should heed that recommendation.”

Read the full report here: Medicaid Work Requirements Can’t Be Fixed: Unintended Consequences Are Inevitable Result

Brian Kennedy II is a public policy analyst for The Budget & Tax Center at the N.C. Justice Center.

NC Budget and Tax Center

Temporary re-opening of government is no solution

Last Friday afternoon, the President announced he would support a bill that would temporarily open the government until Feb. 15. Quickly following the announcement, both the House and Senate moved forward legislation to approve this measure and the President signed the bill late Friday evening.

The temporary re-opening of government agencies will allow federal workers to return to work and receive back pay while lawmakers continue to negotiate a longer-term funding proposal.  Still on the table and strongly desired by the President is funding for the proposed southern border wall that precipitated the original shutdown.

The re-opening of government is an important first step in recognizing both that the federal government provides critical services such as protecting air travel and providing food assistance to families, and that federal workers, like all workers, play a critical role in the functioning of our economy.  

It is important to note that bouncing back will not be easy and that:

  • Some government agencies will face long backlogs that will take weeks, if not months, to address.  
  • Uncertainty remains such that programs and services for those Americans (and North Carolinians) most in need should likely continue to prepare contingency plans should government shutdown again.
  • Economic damage has been done.

Given the temporary nature of the measure and the seeming lack of change in positions in the original debate, this measure does not take away the possibility of a future shutdown (or an emergency declaration for that matter). Both have been threatened should Congress not approve the border wall that President Trump has demanded.  

In that way, our communities remain under the threat of a fundamental shift in the way that our budget priorities are negotiated — where now shutting down the government and services delivered across the country is on the table. It should never be — especially not as a way to strong-arm racist and unpopular policy.

NC Budget and Tax Center

Few workers have enough savings to withstand a long-term government shutdown

The shutdown of the federal government is having a detrimental impact on employees who are either furloughed or who are working without pay. Last Friday marked the first full pay period some employees went without a paycheck, and while their pay may be on hold, their bills certainly are not.

Workers are still expected to pay rent, families are still expected to pay for childcare, and recent graduates are still expected to pay their student loans.

Unfortunately, far too few Americans actually have enough savings to go for weeks, let along an entire month, without pay. When the Federal Reserve’s Survey on Consumer Finances asked families how they would deal with a hypothetical income shortfall, 58 percent of families said they would draw from savings and investments, while only 21 percent responded that they would need to borrow money. But when families who actually faced income shortfalls reported how they made ends meet, only 44 percent were able to pull from savings while 43 percent of families had to borrow money, including taking on credit card debt.

The reality is that nearly 30 percent of all of households, regardless of income, have less than $1,000 in savings. Most Americans are ill prepared to handle a financial emergency such as an illness, job loss, or, in this case, a government shutdown.

According to The Center for Enterprise and Development, more than 25 percent of North Carolinians are asset poor, and more than half (51.5 percent) of all North Carolinians are “liquid asset poor,” meaning they do not have enough cash savings for a safety net in case of a family emergency.

Middle-income, not just low-wage workers, are at risk of running through their savings and going into debt to weather the shutdown. The Survey on Consumer Science finds that the typical worker who earns between $45,000 and $70,000 each year has $2,200 in savings. While this may be enough to pay for a car repair or an unexpected home expense, it is not nearly enough to cover everyday expenses. According to the Living Income Standard, a family with just one adult and one child incurs at least $3,000 in expenses each month. Families with multiple children who live in high-costs counties or who earn lower wages face even larger challenges.

Workers who earn between $25,000 and $45,000 a year typically have $1,500 in savings, and most families who earn even less have $500 or less in case of emergency.

Even in households with middle class income, the government shutdown is having a disproportionate effect on households of color.

The Survey of Consumer Finance demonstrated that even within income brackets, there are still disparities in which families have access to an adequate amount of savings. When households were asked if they could borrow $3,000 from friends or family in case of emergency, only 43 and 49 percent of Black and Hispanic households answered “yes” while 71 percent of white households reported they could.

This points to the long-term effects of occupational and educational segregation, wealth inequality, discrimination in the workplace and financial institutions, and other factors. Although Black and Brown families may have similar incomes to their white counterparts, they often pay more for access to capital through loans, are less likely to receive intergenerational wealth transfers to avoid costs such as mortgage insurance, and are more likely to provide ongoing financial support to family members who earn less.

While there are many factors that result in different liquid asset rates for families along lines of race and ethnicity, the end result is that the combination of the government shutdown and a lack of income can easily push families into long-term debt situations — and even out of the middle class altogether.

Ending the shutdown is the only way to ensure that these workers and their families do not suffer from a lifetime of financial burdens as a result of the President’s obsessive pursuit of a racist and xenophobic immigration policy.

NC Budget and Tax Center

Government shutdown is harming N.C.’s food retailers and the families that depend on them

The effects of the partial federal government shutdown are wide reaching. The shutdown, which is now in its 18th day, impacts federal agencies responsible for providing critical assistance to millions of North Carolinas. In particular, the nation’s food assistance program, the Supplemental Nutrition Assistance Program (SNAP, formally known as food stamps) is at risk both in the near and longer term should the shutdown continue. The shutdown highlights the critical role that federal food assistance plays not just in people’s households but in communities at large.

Across the nation, more than 2,500 grocery stores and retailers are unable to accept SNAP benefits as a result of the shutdown due to their inability to renew their permits to accept food assistance benefits during the shutdown.

To view an interactive map of these locations and find out more, visit ncjustice.org/hunger

Retailers in North Carolina are disproportionately impacted. According to the USDA, 158 retailers and grocers in the state are no longer able to accept food assistance from families in need.  These retailers are providing food access to families across the state, and many are in areas that lack many options for families to secure food for their table.

This disruption in retailer’s abilities to accept SNAP has far-reaching consequences. Nearly two-thirds of households that receive SNAP are families with children, and almost a third are families with members who are elderly or have disabilities. And while more than 42 percent of SNAP families are employed, many of those still rely on food assistance to make up for low wages and unpredictable work schedules.

A disruption in the ability of families to access foods, no matter how short or small, means that the North Carolinians who need help the most are the ones bearing the burden of this government shutdown.

Families in need are not the only ones affected. Last year, SNAP was responsible for bringing in $2.14 billion into the North Carolina economy through local retailers and grocery stores. These businesses, especially in rural and low-income communities, are vital employers. This government shutdown impacts their bottom lines, making it harder for them to employ their workers.

The ripple effects of the shutdown will continue to affect our communities across North Carolina. The multiple harms caused by this shutdown highlight the critical role that the federal government plays in the everyday lives of every American.

NC Budget and Tax Center

Gov. Cooper proposes bold plan for Hurricane Florence recovery

This week, Governor Cooper released a report detailing the damages the state sustained from Hurricane Florence as well as a plan and recommended budget for rebuilding efforts. The plan recommends a total state commitment of $1.5 billion.

“In September 2018, Hurricane Florence brought high winds, dangerous storm surge and record rainfall that caused historic flooding throughout North Carolina. At its peak, Hurricane Florence was a Category 4 storm as wide as the entire state with winds reaching 140 mph. The storm hovered over North Carolina for six days, inflicting even higher levels of rainfall, storm surge, and flooding than Hurricane Matthew only two years prior. This deadly storm has left a lasting impact on families and neighborhoods across our state, resulting in 40 confirmed fatalities. Property damage and power outages were widespread, cutting power to over a million people and forcing tens of thousands of families to take refuge in emergency shelters. While the impacts of Hurricane Florence were felt across the state, those who live in the southeast bore the brunt of the storm. Twenty-eight counties have been designated by FEMA for federal disaster assistance. An estimated 2.6 million people, or one in four North Carolinians, live in one of the designated counties. Preliminary impact estimates approach $13 billion in damages across the state. This is over two times the $4.8 billion physical and economic cost of Hurricane Matthew in 2016.”

Legislators will return to Raleigh in a Special Session Monday devoted to funding long-term recovery needs for Eastern North Carolina.

Check out the full report HERE