Medicaid works, as do most of the adults it covers

Work requirements are nothing more than a backdoor way to way to take health care coverage from millions of people.

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By Hannah Katch and Jared Bernstein

Because so many Americans depend on publicly provided health care, the Trump administration and Republican budget writers have had trouble getting the votes they need to dramatically slash Medicaid funding as an offset for their high-end tax cuts.

In an attempt to hit their numbers, they’re now doubling down on a Medicaid work requirement. But no one should be fooled. Though it doesn’t sound unreasonable to require people who can work to do so to get a government benefit, this is nothing more than a backdoor way to take coverage from millions of people with Medicaid, many of whom are already working. It would also shift over $100 billion in cost to the states. That’s not just our opinion. It is the empirically observed outcome of state-level attempts to implement Medicaid work requirements.

The bill that the House Energy and Commerce Committee will consider this week would require all states to take coverage from low-income people who don’t meet work requirements. Though the rhetoric is focused on getting people back to work, experience shows it will do the opposite.

In 2018, the Trump administration became the first to authorize states to take Medicaid coverage from people who didn’t meet work requirements. Notably, nearly all adults with Medicaid coverage are already working (64% of enrollees ages 19-64), are caregivers (12%), are ill or disabled (10%), or are in school (6%).

When Arkansas applied this policy in 2018, it failed disastrously. Even though nearly all enrollees should have met the work requirement or qualified for an exemption, a large share tripped over the red tape and lost their health care coverage anyway. About 1 in 4 people in Arkansas subject to the requirements—about 18,000 people—lost coverage in just the first seven months of the new policy, before a federal judge determined that the policy violated the purpose of the Medicaid program and put a stop to it.

New Hampshire followed Arkansas’ lead in 2019, and similarly found that about 2 out of 3 enrollees subject to the new policy would have lost their health care coverage in the first two months—so the state suspended the program. Shortly after, it was halted permanently by a federal court.

And in Georgia, the only state allowed to continue a work requirement policy, which applied to a narrow eligibility expansion, the administrative costs to run the program were astronomical—nearly $60 million in the first year to cover just 4,200 people.

That’s an awfully consistent track record.

No one should be surprised by these findings. Taking health care coverage from people who don’t meet work requirements—or don’t report that they’re working—fails to increase employment, in no small part because not having coverage makes it harder for many people to find and especially to keep a job. In fact, it’s the classic definition of a safety net program. If you have a net to catch you if you fall, you’re more likely to maintain employment if health needs arise.

Congress could reject this failed proposal and instead take steps that would make it easier for low-income people to work. Montana established a work referral program that provides one-on-one career coaching, financial literacy, and job placement services to Medicaid enrollees. In the first 2.5 years of the program, about 32,000 Medicaid enrollees signed up and received services. Of those, 63% were employed after their first quarter in the program, and 83% who were employed reported a wage increase in the year following their participation.

The bill includes a range of other cruel Medicaid policies that should also come out. In yet another play to harass people off of their Medicaid coverage, it would roll back a rule finalized by the Biden administration to modernize and simplify how people enroll and stay enrolled in coverage. Repealing this rule will save the government $162 billion over the next 10 years— largely because rolling back the rule reinstates a lot of unnecessary red tape, which reduces the total number of people enrolled.

It includes further cuts to federal Medicaid funding for states that also use their own state funding to cover undocumented people, prohibiting Medicaid payments to Planned Parenthood, and prohibiting states from using federal Medicaid funds to pay for gender affirming care for youth. The bill would also limit how states fund their share of Medicaid costs and add mandatory copayments for some people with Medicaid coverage.

The bottom line here is twofold. First, Medicaid works, as do most people with Medicaid coverage. The program is doing what we want it to do: provide economically vulnerable Americans with the health coverage they need to live their lives and contribute to society, just like the rest of us.

Second, all of these cuts are in the service of lowering the budgetary cost of tax cuts that provide the vast bulk of their benefits to the wealthiest households. The administration and its allies appear to be trying to solve the problem that the rich have too little and poor have too much. When it comes to Medicaid work requirements, that’s not just egregiously unfair. Based on the many examples we cite, it’s also counterproductive.

Hannah Katch was senior adviser to the administrator of the Centers for Medicare & Medicaid Services throughout the Biden-Harris administration. She also served as a Medicaid policy expert at the Center for Budget and Policy Priorities and as an administrator of the California Medicaid program. Jared Bernstein was chair of President Joe Biden’s Council of Economic Advisers.

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