Medicaid Work Requirements Making Headway at the State Level

April 26, 2023 by Kate Michael
Medicaid Work Requirements Making Headway at the State Level
Heather Hahn Screenshot

WASHINGTON — Every so often the idea of imposing work requirements in Medicaid comes through Congress. Well, the concept is making headway again, and this time at the state level. 

Currently, Arkansas is the only state to have implemented work and reporting requirements in Medicaid, requiring adults aged 30-49 to work 20 hours a week, participate in community engagement activities or qualify for an exemption to maintain health care coverage. But that policy was put on hold in April 2019 after just over a year. 

Now, a federal court has ruled Georgia’s own condition for work and reporting requirements for Medicaid eligibility could meet program objectives, and the state is poised to be the second to attempt implementation of work requirements in its limited expansion of Medicaid this summer. 

There are other states interested in similar measures. This policy resonates with many, especially Republicans, with the larger theme of pathways to prosperity for those who deserve it through hard work and personal responsibility.

But there are others who worry that these requirements will harm people and keep them from important social services for failure to comply, including some who were eligible but simply could not navigate the process.

“A Medicaid work mandate is a bit of a policy Rorschach test,” Larry Levitt, executive vice president for Health Policy at KFF, formerly Kaiser Family Foundation, said at a discussion of work requirements for social services this week. 

While some policy wonks and researchers argued that imposing requirements might just create additional barriers — including purely administrative barriers to maintaining Medicaid coverage — Angela Rachidi, senior fellow at the American Enterprise Institute, believes studies of social programs for similarly disadvantaged groups including SNAP (food assistance) and TANF (cash assistance program) attest to the likelihood that work requirements will benefit recipients.

“My assessment of the evidence is a little bit different,” Rachidi said. “I spent a little over a decade working in the New York City Department of Social Services, and we ran the TANF program, SNAP and Medicaid, so I have an intimate knowledge of how these programs are run.

“It’s fairly uncontroversial to conclude that the work requirements led to increased employment,” she continued. “We can argue about whether the effects were meaningful, and the types of jobs that people were in. … But it did lead to positive employment gains for single mothers.”

Heather Hahn, associate vice president of the Center on Labor, Human Services, and Population at the Urban Institute disagrees, although she admitted that, “there’s a very general rule in federal law that states need to be ensuring that their [social services] recipients are working within 24 months.”

“What I see from … evidence … is that in some cases there were modest increases in employment that were temporary,” she said, “but those increases didn’t achieve the ultimate goal of self-sufficiency.

“The clear lesson … is that [work requirements] are really counterproductive,” she argued. “On the surface of it, they seem really sensible, but when we scratch the surface and look at the evidence, we find that work requirement policies really … substantially reduce the number of people who are getting the benefits, with very very little increase in earnings.”

KFF’s own recently updated analysis of 2021 data shows that most adults on Medicaid are already working or face a barrier to work.

This study found that shy of 10% of adults on Medicaid reported that they were unable to find work or were not working for another reason. This percentage of the population would be directly impacted by work requirement policies being implemented in states. 

“Enrollees noted that the work requirements didn’t provide an additional incentive to work especially since many of them were already working,” shared Madeline Guth, senior policy analyst for KFF’s Program on Medicaid & Uninsured. “Instead, the requirements added anxiety and stress to their lives.”

“Ten percent of 40,000 people is a lot of people,” Rachidi countered. 

“I think the verdict is still out … and [after Georgia implements its work requirement], I’d like to see researchers going in, without preconceived notions, that can actually see the effects.

“In general, my read of the evidence [for similar work requirements in TANF], is that it leads to employment increases … so to me, it’s an issue of how do you implement work requirements in a way that can have these positive effects that we’ve seen in some of the research,” Rachidi said.

A work requirement in Georgia’s proposed bill establishes that the federal government will not provide Medicaid funds for any adult enrollee, aged 19-55, that does not comply with either working or participating in a community service program, though there are some exemptions.

The state has estimated that its program, called Georgia Pathways, would provide coverage to about 64,000 individuals, though KFF believes this is significantly less than their own estimated 269,000 uninsured individuals in Georgia’s Medicaid coverage gap (parents with incomes that exceed Medicaid eligibility levels but are below the federal poverty level, plus childless adults with incomes below the FPL) who could be covered if Georgia adopted the Affordable Care Act Medicaid expansion instead. 

“I’m certainly concerned about people who might fall through the cracks … but I think that is why states need to be careful about how they are implementing these programs,” she said. 

“There are people receiving benefits currently, across programs, who are not eligible. These are taxpayer-funded programs with billions of federal dollars going into [them]. We have to have some verification process.”

Citing her experience in New York, Rachidi said work requirements could be satisfied by actually being employed or by engaging in a “work activity,” including work fairs put on by a government agency or work readiness contract services for individuals, like a job search program or education and training. 

But Hahn would not be swayed.

“Red tape … leads to people losing eligibility even when they are eligible or should be exempt from work requirements,” she said. “So adding work requirements we know is going to add red tape and doesn’t bode well for administrative processes.”

She claimed the entire issue is a fundamental difference in approach to the question of who should get benefits. 

“Do you want to emphasize that no one gets a free lunch or … emphasize that no one goes hungry?” she asked.

While Hahn trusts that “there is very strong work ethic in this country,” and that programs like TANF, SNA and Medicaid are work supports, Rachidi has concerns about employment disincentives built into social service programs as they currently stand.

“In my mind, the way to escape poverty and have a flourishing life is to work and move up the ladder,” Rachidi said. “I want all of those families who are capable of working to receive the benefit of working, and I don’t want federal programs to be pulling the rug [out from] underneath them because these programs disincentivize work.” 

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