The majority leadership in Congress is considering establishing work requirements in Medicaid, but if work requirements were established in states that have expanded their programs, more than 5 million people could lose their coverage, according to a new study from the Urban Institute and the Robert Wood Johnson Foundation.
Analysts looked at the Limit, Save, Grow Act of 2023, which was passed by the House. That particular piece of legislation would have withheld federal funding for Medicaid expansion enrollees ages 19 to 55 who did not report working or participating in a work-related activity for at least 80 hours per month, unless they qualified for and obtained an exemption from the work requirement.
They also looked at Arkansas and New Hampshire, which implemented Medicaid work requirements for expansion enrollees from 2018 to 2019. Comparing that to national data from the Urban Institute's Health Insurance Policy Simulation Model for 2026, authors estimate that 13.3 million expansion adults ages 19 to 55 would be subject to a federal work requirement in 2026.
States could automatically exempt or deem compliant about half of them using information from state databases if they followed approaches similar to those of Arkansas and New Hampshire, the report found. The remaining adults would have to request an exemption based on other criteria, or report work activities to maintain coverage.
Based on those patterns and historical trends, an estimated 4.6 million–5.2 million people would lose federally funded Medicaid, constituting 34% to 39% of expansion enrollees ages 19 to 55.
WHAT'S THE IMPACT
The analysis assumes that work requirements would only apply to expansion enrollees, and that states use available data to automatically exempt enrollees from reporting requirements, as Arkansas and New Hampshire did under prior waivers. But some states may not replicate the data-matching efforts employed by Arkansas and New Hampshire, meaning potential coverage losses would be higher.
For instance, Georgia's Pathways to Coverage work requirement, where enrollment has fallen far short of projections, does not use data matching to determine compliance, the authors of the study said.
Some recent legislative proposals would extend work requirements to a larger segment of the Medicaid population, and if that legislation differs from the Limit, Save, Grow Act in a number of specific ways, coverage losses would be much higher.
That would happen if more adults in the expansion group, such as those ages 56 to 64, are subject to work requirements, or if exemptions for caregivers and other groups are more limited. Coverage losses would also be higher if the requirements affect expansion enrollees as well as adults in traditional eligibility categories, including low-income parents and adults who qualify for Medicaid based on a disability.
THE LARGER TREND
Most people with Medicaid coverage are currently already working, a February KFF analysis found. In 2023, most Medicaid adults under age 65 were working – among those who don't receive benefits from Social Security disability programs, Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI), and who are not also covered by Medicare - 92% were working full or part-time, or not working due to caregiving responsibilities, illness or disability, or school attendance.
The remaining 8% of Medicaid adults reported that they are retired, unable to find work or were not working for another reason.
A draft budget outline from congressional Republicans includes requiring Medicaid enrollees to work or look for work as a condition of receiving coverage.
While the details of the current proposal are not yet available, an analysis of an earlier proposal by the Congressional Budget Office shows that Medicaid enrollment would drop and that federal spending on Medicaid would be reduced substantially, but that the policy would not increase employment.
The first Trump administration encouraged states to apply for Section 1115 waivers that included work and reporting requirements as a condition of Medicaid eligibility. For the first time in the history of the program, the administration approved waivers in 13 states. Arkansas was the only state to implement the policy with consequences for noncompliance, resulting in 18,000 losing coverage for failure to meet work or reporting requirements. Courts struck down many of the waiver approvals, including in Arkansas, and the Biden administration rescinded the remaining waivers, or they were withdrawn by the states.
Currently, Georgia is the only state with a work requirement waiver in place, following a legal challenge to the Biden administration's move to rescind it.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.