It’s known as a “benefits cliff.” That’s when an increase in income triggers a loss of government benefits like Medicaid.
According to a new report by conservative think-tank the Sutherland Institute, 78% of those recently surveyed feared falling off that cliff.
“It's a daily battle for some families,” said Daryl Herrschaft, director of Take Care Utah.
Herrschaft’s program helps people navigate the health care system. For some, the income requirements can make it difficult to maintain coverage. He said a potential loss of benefits is something they hear a lot of.
“We work with folks all the time that are delaying taking a job so that they can get approved for Medicaid while they're still unemployed.”
According to the Utah Department of Health and Human Services, Medicaid benefits are available for individuals who make less than $1,670 per month. For a family of four, it’s $3,458 monthly.
Other highlights from the Sutherland report include:
- 43% of respondents said they had intentionally limited their household income to avoid a benefits cliff.
- 62% of respondents believed that earning more would trigger a loss in benefits, effectively leaving them stuck in a low-income job.
“Working hard and earning more should make your family better off,” said Nic Dunn, Sutherland Institute’s vice president of strategy and communications and the report author. “Unfortunately, for some families in Utah, they don't actually feel that that's true, which is evidenced by some of their economic decision making.”
To Dunn, a benefits cliff only hurts the upward mobility of Utah families.
“If I believed that me working harder and earning more for my family actually made my family worse off, or left us kind of stuck in the same place, I don't know how I would deal with that as a parent,” he said.
While Dunn acknowledges there will be disagreements in the root causes and severity of the problem, he said there is room for common ground in finding answers to the issue. The Sutherland report does offer some solutions from financial education and increased awareness of alternative programs like the national health care marketplace to more policy-focused fixes like state-level tweaks to the benefits system.
“Where we have to focus,” Dunn said, “is how to empower these families to feel more confident, to take the opportunities before them.”
And it’s not just conservative think tanks that are on board with these solutions. Herrschaft’s program exists because navigating health care is hard, and so is the paperwork involved. Both are a direct result of current policies and programs.
“The educational piece is really about how to navigate the policy because it's so confusing,” he said.
Some benefits advocates see an uncertain future for programs like the national health care marketplace — especially when it comes to government subsidies aimed at getting more people insured.
“Those are going to expire next year,” said Utah Health Policy Project Analyst Daniel Sloan. “Congress could renew them, but that may be unlikely, given the outcome of the election.”
For those concerned about policy fixes, Sloan said focusing on people who make too much for Medicaid but not enough to reasonably afford a health care marketplace plan — those who have fallen off the benefits cliff — should be a priority as lawmakers at the state and federal level reconvene in 2025.
“I think even more people will probably be having these concerns in the next year or so with not being able to afford a marketplace plan, but not necessarily being eligible for Medicaid.”
