Medicaid work requirements have been proposed over the years by lawmakers at the federal level and in various states to reduce government spending. Work requirements have also been proposed as a means of removing theoretical disincentives for able-bodied adults to seek and maintain employment.
Work requirements are not a novel concept in safety net programs. They currently exist in the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). However, the efficacy of work requirements in Medicaid to promote employment is not a settled debate.
In 2018, the Trump Administration gave states the flexibility to choose whether to implement work requirements by approving 1115 waivers for states to impose work requirements in their respective Medicaid programs. Thirteen statesincluding Georgia, Arkansas, and Kentucky received approval under this process. However, most of these waivers were struck down in court. More recently, lawmakers in Congress introduced a bill that would implement work requirements for able-bodied adults. The Congressional Budget Office (CBO) estimates under this or a similar proposal, approximately 15 million Medicaid recipients would be subject to work requirements resulting in $109 billion in savings over 10 years.
Kaiser Family Foundation analyzed the work status and characteristics of Medicaid enrollees in 2023 and found that the majority of adults aged 19-64 covered by Medicaid were working. Additionally, the data indicates that health status and education level are strong predictors of work. In other words, the less healthy you are, the less likely you are to work. This presents an interesting question: could Medicaid work requirements inadvertently make it more difficult for people to get back to work?
The syllogism goes something like this: Access to health care makes people healthy. Healthy people are more likely to work. Access to health care makes people more likely to work. This is an oversimplification, but it’s also common sense. If Medicaid can provide people with the health care, they need to get healthy, they will be more likely to get back to work.
According to a 2021 CBO report, work requirements for Medicaid enrollees are less likely to lead to employment and more likely to reduce income, including benefits, when applied to people who have conditions that make it difficult to find and keep a job such as taking care of children or going to school. The report also proposes a different approach: requiring able-bodied adults without dependents to work. The report explains, “Under this policy, which would be similar to the requirements imposed in Arkansas, able-bodied adults who have no dependents and who are between the ages of 19 and 49 would lose Medicaid coverage if they did not participate in work-related activities for at least 80 hours per month for three or more months over the course of a year.”
Health policy experts are weighing in on the future of Medicaid work requirements under President Trump’s second term. The President of Paragon Health Institute, and former Special Assistant for Economic Policy to President Trump in his first term, acknowledged the legal challenges that would accompany these efforts are probably not worth the effort. However, it is unclear at this time whether the Trump Administration will revive previous efforts or take a different approach.