Protests broke out outside Senate Majority Leader Mitch McConnell's office after Senate Republicans unveiled their healthcare bill.
Protesting proposed Medicaid cuts, a wheelchair-using demonstrator is removed from a sit-in outside Senate Majority Leader Mitch McConnell's office. Kevin Lamarque/Reuters

With the GOP’s massive restructuring to Medicaid awaiting a vote, low-wage workers need special attention.

By raising Medicaid’s eligibility threshold to 138 percent of the poverty line, the Affordable Care Act insured millions of poor, working Americans for the first time. The current Republican plan to repeal and replace the ACA, now postponed for a vote, would effectively reverse that.

According to the Congressional Budget Office’s analysis, 22 million Americans are projected to lose coverage under the GOP’s “Better Care Reconciliation Act.” Of those, some 15 million are currently covered under Medicaid, since the BRCA would lower the window pushed up by the ACA.

Why do this? The ACA "went way above the poverty line to many able-bodied Americans," the White House counselor Kellyanne Conway told ABC News on Sunday, echoing a common refrain of many Republicans. "If they are able-bodied and they want to work, then they'll have employer-sponsored benefits like you and I do."

But here’s the thing: Of the 70 million Medicaid participants nationwide, about 24 million are indeed “able-bodied” adults between the ages of 19 and 65. And, according to the Kaiser Family Foundation, roughly 60 percent of them do work full or part-time, and 80 percent live in families where at least one person does. The problem is their jobs don’t pay enough.

Also, their employers often don’t provide insurance coverage. Someone who works full-time for the full year at the federal minimum wage of $7.25 would qualify for Medicaid, and many such workers do.

The details of the GOP plan, which was crafted in secret, arrived this week alongside new insights into another topic with major implications for the working poor: raising minimum wages. An eye-opening, not-yet-peer-reviewed study from researchers at the University of Washington found that Seattle’s decision to push its minimum wage from $9.47 to $11 in 2015 and then to $13 in 2016 “ended up costing its low-wage workers time on the job, hundreds of dollars of annual income, and a shot at a better livelihood,” as Annie Lowrey writes in The Atlantic.

The findings stand in contrast to most of the established research on minimum wage increases, which has often shown that the income benefits for low-wage workers vastly outweigh the costs in terms of job and hours loss. Indeed, a team of equally well-regarded economists at the University of California, Berkeley released a study of Seattle’s minimum wage experiment just last week that drew far sunnier conclusions with a different methodology. But the University of Washington study was well-designed, and it will be a part of future discussions by states and cities mulling considerable wage hikes, as San Francisco, Los Angeles and New York City have already done. Certainly, opponents will cite it as supporting evidence.

The question of what constitutes a wage that’s fair to workers and bearable to the economy is intertwined with healthcare. One of the same Berkeley researchers who found positive outcomes for Seattle’s low-wage workers has also found that higher minimum wages tend to lower state Medicaid spending. That is, the more people are paid, the further past the Medicaid threshold they are pushed, and the less the state has to spend. Pennsylvania is considering a higher minimum wage for this very reason.

But workers who earn their way out of Medicaid can easily find health coverage impossible to afford. Even when companies sell employees insurance—whether in deference to the ACA’s employer mandate, which requires companies with more than 50 full-time workers offer plans to most of their employees, or not—the cost remains out of reach for many low-wage workers. Affordability, not proximity to jobs, is the leading reason some 28 million “able-bodied” Americans of working age remain uninsured.

Think of it this way. By law, “affordable” employer-sponsored insurance means coverage priced at 9.5 percent or less of a worker’s annual income. For, say, a full-time hotel cleaner in California earning slightly more than the state minimum wage of $10.50, that would translate to roughly $41 out of her $429 weekly paycheck—easily unaffordable if she’s also footing rent, utilities, groceries, and transportation. For her income level, both state-sponsored Medicaid program and her company’s insurance plan would be out of reach. It’s no wonder that a 2013 study by ADP, the payroll processing company, found that only 37 percent of workers who made between $15,000 and $20,000 per year bought employer-sponsored plans when offered. (The subsequent passage of the ACA reportedly made little difference.)

Besides shrinking the Medicaid pool, the Republican healthcare plan would push company-sponsored coverage even further out of grasp for low-wage workers by repealing the ACA’s employer mandate, which business leaders strenuously resisted in the first place. According to the CBO, some four million Americans would lose coverage as a result. With fewer people buying into employer-sponsored plans, overall costs for insurers and businesses would rise—as would costs to plan-holders. Premiums and deductibles would be so burdensome by 2020 that “few low-income people would purchase any plan,” according to the budget office.

Besides the Berkeley research, a few other studies have asked, more broadly, whether higher wages expand access to healthcare by putting more medical spending power in a person’s pocket, or decreases it by discouraging employers from offering generous plans. The best evidence suggests that there is no negative impact, but this relationship hasn’t been explored too deeply.

What is well documented is the fact that low-wage workers get sick more often, have lower life expectancies, and, frequently lacking insurance, are more exposed to cycles of poverty and illness that limit their capacity to find and keep stable work. The debate over the meaning of a “livable” wage will only heat up with the contribution of the University of Washington researchers. Here’s hoping it accounts for the federal attack on the working poor’s access to health.

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