Medicaid, the joint federal and state program that provides health care for low-income individuals, has long been a critical part of the U.S. health care system. Since the 1990s, the federal government and states have grappled with the rising costs of health care while simultaneously seeking to extend and ensure access to coverage and care within their communities.
With recent polling showing that more than a half of Americans believing that over 25% or more of federal spending is wasted, the voices for increased accountability for federal spending that have existed for years have grown to a crescendo with the Trump administration. As many Americans see their dollars going to programs they view as highly questionable, spending on Medicaid and Medicare is being swept up into these discussions. In FY2024, the federal government spent over $584 billion on Medicaid and the Children’s Health Insurance Program (CHIP).
The establishment of the Department of Government Efficiency (DOGE) and a new push for aggressive oversight have renewed attention on program integrity. Supporters of work requirements argue that, unlike Medicare, Medicaid serves a population that has not necessarily contributed to payroll taxes, raising questions about eligibility and personal responsibility.
The Case for Work Requirements: Promoting Work and Employment
With the expansion of Medicaid in the 2000s, some lawmakers have encouraged individuals, especially those seen as able-bodied and without children, toward full employment. In the 1990’s, bringing work requirements to welfare was an effort that enjoyed the support of not only a Republican-majority in Congress but also of a Democratic president. While Medicaid has traditionally been viewed as separate from the safety nets of Temporary Assistance for Needy Families (TANF) and Supplemental Nutrition Assistance Program (SNAP), the expansion of the program over the past decade-plus has caused it to be viewed—by some at least—as more along the lines of these programs.
The Case Against Work Requirements: Administrative Burden and Confusion
Arkansas’ brief implementation of work requirements revealed serious flaws in adding work requirements to Medicaid. In just nine months, 18,000 enrollees lost coverage, largely due to confusing or inaccessible reporting systems. Nearly one-third of those subject to the rules were unaware of the requirement altogether.
The Case Against Work Requirements: Barriers to Access to Coverage and Care
The experience in Arkansas showed that the additional administrative burden resulted in a loss of coverage and ultimately a loss of care. Delayed care, skipping medications, and the burden of medical debt were all reported.
Under the Georgia “Pathways” waiver, the experience has played out differently but with a similar net result. By expanding to 100% of the Federal Poverty Level, the state of Georgia thought that more individuals would enroll in Medicaid, but in the Georgia waiver’s first year, only a little more than 4,200 people signed up, falling far below the state’s projection of adding 100,000 new enrollees.
The Case Against Work Requirements: Most Medicaid Enrollees under 65 Are Working
The challenge posed by work requirements would be deciphering which individuals might truly be avoiding work without imposing barriers for those enrollees who are employed.
Most Medicaid enrollees under the age of 65 are currently working or otherwise unable to work because of other responsibilities, such as being a caregiver, or having a disability. In 2023, the Kaiser Family Foundation found that 64% of Medicaid enrollees were either working full- or part-time, and 29% were not working because of caring for one or more dependents (12%), having a disability or illness (10%), or attending school (7%). Eight percent of individuals were retired, unable to find employment, or not working for another reason.
Working does not necessarily mean you have access to health care coverage. Employed Medicaid enrollees often work for small employers that do not provide health coverage, or the cost of coverage their employer does offer is simply too much for them to afford.
Medicaid and the Budget Debate in Congress
With the federal debt exceeding $36 trillion and no apparent slowing in sight, a significant voice of the Republican majority in Congress will continue the push for savings and cost-cutting measures as part of this year’s congressional budget and as part of the budget reconciliation process.
The House-passed budget called for $880 billion in savings from programs within the jurisdiction of the House Energy & Commerce Committee. As Medicaid accounts for 90% of the Committee’s outlays, programmatic changes in Medicaid are in the offing.
In 2023, House Republicans sought to add Medicaid work requirements, also known as “community engagement” requirements, in H.R. 2811, the Limit, Save, Grow Act of 2023. Community engagement was defined as participating in work-related activities for at least 80 hours per month. Based largely on the experience of Arkansas, the Congressional Budget Office (CBO) estimated adding work requirements would save the federal government $109B over 10 years. CBO also estimated the number of people without health insurance would increase by 900,000, the employment status of and hours worked by Medicaid recipients would be unchanged, and state costs would increase by $65B.