Medicaid: Do Work Requirements Make Sense?
Philip A. Chan, MD and Amy S. Nunn, ScD
Medicaid: Do Work Requirements Make Sense?
Medicaid is the single largest source of health coverage for people in the United States and is overseen at the federal level by the Centers for Medicare and Medicaid Services (CMS). Importantly, Medicaid is funded by both the state and federal governments. The percentage of federal funding to states varies and is determined by each state's per capita income. In Rhode Island, state funding makes up approximately 1/3 of total Medicaid costs, while matching federal support is 2/3 of total Medicaid costs. Rhode Island, similar to many states, is highly dependent on federal funding to support Medicaid. Any cuts to Medicaid at the federal level significantly impact Rhode Island's ability to fund Medicaid.
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The new OBBBA legislation impact Medicaid specifically in several ways. The largest change is the addition of Medicaid “Work Requirements”. This requires “able-bodied” adults aged 19-64 to work for at least 80 hours a month in order to qualify for Medicaid. There are exemptions including pregnant people, those with serious medical conditions, tribal members, parents/caregivers of a dependent child 13 years or younger. Importantly, states will be required to review individuals on Medicaid to ensure they meet this requirement. The basis for this change was to encourage people to become employed and, therefore, reduce reliance on government assistance and, ideally, save taxpayer money.
The first Trump administration promoted Medicaid work requirements through demonstration waivers (i.e., Section 1115 Projects). Although a handful of states were approved, only Arkansas was approved. In June 2018, Arkansas became the first state to implement a Medicaid work requirement for adults aged 30-49 years old [REF]. The program required people to file monthly online reports on their employment to maintain coverage. The program ended in April 2019 when a federal judge halted the effort. During that time, 18,000 adults lost insurance. Furthermore, work requirements did not increase employment based on scientific evaluations of the program. People who lost Medicaid coverage due to the work requirements reported significant medical debt, delayed care, and delayed treatments.
In July 2023, Georgia launched the Pathways to Coverage program, which requires lower-income adults to work, attend school, or volunteer for at least 80 hours a month to obtain Medicaid [REF]. During the 18 months of implementation, 6,500 people were covered which is a fraction of the 240,000 uninsured people that were estimated to be eligible. Reports of application backlogs, excessive paperwork, and complex rules have hampered the program. The program has cost more than $86.9 million, three-quarters of which has gone to “consultants”. Initially, the program required verifying that people were working every month. However, that has been changed to at the time of enrollment and during an annual renewal. Georgia is the only state with a current Medicaid work requirement program.
Based on the evidence to date, Medicaid work programs appear to create significant administrative work and inefficiency, lead to loss of health insurance coverage, and lead to delays in medical care and treatment, which likely further increase healthcare costs in the long run. Furthermore, the majority of Medicaid spending is by people with complex medical conditions, not “able-bodied” people who can easily work.
Addressing healthcare in America means ensuring that people have access to care, not creating administrative hurdles and other challenges that limit care. Preventive care and screening for diseases lead to cost savings and a healthier population that can work and contribute to society. Instead of investing in additional government bureaucracy to implement Medicaid work requirements, we should be using funding to increase access to healthcare and fund our hospitals and primary care clinics which are already overwhelmed. Promoting, not hindering, healthcare access will lead to a more prosperous and productive society.
Philip A. Chan, MD
Amy S. Nunn, ScD