Is Medicaid’s new work requirement a help or hindrance?

Jeremy Nighohossian: Work requirements are a common-sense reform

Medicaid is the government program that is supposed to help the poor afford health care. Its cost to taxpayers has skyrocketed in the last few years, consuming more than 12% of federal tax revenue collected by 2025.

Projected Medicaid spending from 2025 to 2034 — before the One Big Beautiful Bill Act —was expected to total $8.2 trillion,  $2.7 trillion more than if Medicaid had grown proportionally to the population and inflation.

Before the Affordable Care Act — Obamacare — Medicaid was a state-by-state program and often was available only to a subset of people below the poverty line, especially mothers and children, but generally not working-age, work-capable adults.

The ACA allowed states to expand Medicaid to cover every person below the poverty line and some above it, regardless of circumstances. The federal government pays 90% of the costs for those who became eligible due to the ACA expansion.

Then, during the Biden administration, Congress and the president made a concerted effort to make enrollment easier, disenrollment harder and program integrity maintenance weaker. For states and private plans that insured beneficiaries, there was little downside to signing up ineligible people or keeping them once enrolled.

As a result, taxpayer money was unduly shoveled into the coffers of states, health care providers and insurance plans. This was a significant factor in the ballooning of Medicaid.

That buildup undermined the core Medicaid mission of helping people most in need and rendered the program less affordable to taxpayers, threatening to crowd out other priorities. That’s why Congress included reforms in the One Big Beautiful Bill that would diminish abuse and put the program back on a path to provide care for those who need it most.

The new work requirements for Medicaid beneficiaries help accomplish this goal. Requiring able-bodied people to work as a condition for receiving this taxpayer-provided benefit is a common-sense reform.

The work requirements don’t apply to beneficiaries who are pregnant, disabled, a child, a senior, a parent of a child younger than 14 or those who are caretakers for others. The requirements are carefully targeted only at adults who can work and are only required in states that recently expanded Medicaid.

Presumably, the work requirements will help identify and remove abuses like the 2.8 million duplicate enrollments that the Centers for Medicare & Medicaid Services identified. Many of these were Medicaid beneficiaries who remained enrolled in plans despite moving out of state and enrolling in their new home state.

There is almost certainly more dubious enrollment to prune from the program. Work requirements will make fraudulent enrollment, whether deliberate or incidental, even harder to sustain.

Before the ACA, states eschewed coverage of capable adults because policymakers believed that people who could work should work, reserving the safety net for those who were unable. It was a work requirement by default. Now that Medicaid is available to everyone, though, a narrowly targeted work requirement is a reasonable reform.

Critics fear work requirements will impose a paperwork burden on eligible beneficiaries that will lead to massive reductions in Medicaid enrollment and, ultimately, adverse health consequences.

However, these criticisms are based on scant evidence from two states: one that didn’t have enough time to set up and perfect its system before a court ended it, and the other was an add-on program. Neither state imposed the requirements as envisioned in the bill. 

In any case, paperwork burdens will likely not present a big problem, as private insurance companies are paid for each Medicaid enrollee and have strong incentives to ensure that everyone eligible remains signed up.

The Medicaid program desperately needs reforms to make sure benefits go to the people who need them most and at a cost that is manageable for taxpayers. Work requirements help achieve that goal without endangering access for those who need it.

Editor’s note: Jeremy Nighohossian is a senior fellow and economist at the Competitive Enterprise Institute. He wrote this for InsideSources.com. Please send your comments to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.

Ben Ritz: Work requirements increase bureaucracy more than accountability

When Republicans were looking for ways to reduce the cost of their One Big Beautiful Bill Act, one of the first offsets they incorporated was a federal work requirement for Medicaid. 

Proponents claimed this “common-sense” policy would grow the economy by increasing employment and cut wasteful spending on “lazy,” able-bodied people who chose not to seek work.

However, in the states that have tried them, Medicaid work requirements did little to boost employment. Instead, they merely created complex layers of reporting and verification that made it difficult for people to maintain coverage, even if they were still eligible for coverage or would qualify for an exemption from work requirements.

Arkansas pioneered the first state-level work requirement for Medicaid beneficiaries in 2018, which lasted for less than a year before it was halted by a court order. Adults between the ages of 30 and 49 who were neither disabled nor pregnant were required to either work or perform community service to maintain coverage that they had already been granted by the Affordable Care Act’s expansion of Medicaid. 

However, beneficiaries struggled to navigate the state’s onerous verification systems, resulting in 18,000 people losing their coverage soon after the requirement was implemented. 

One recent analysis concluded that while this short-lived experiment had no measurable effect on employment rates, it did increase the uninsured rate for low-income working-age adults in the state by nearly one-fifth.

Georgia, the only state with a Medicaid work requirement still in effect, has experienced similarly disappointing results. When the state expanded Medicaid in 2023, it included a work requirement very similar to the one in Arkansas.

While newly eligible Georgians could not lose the coverage they previously didn’t have, the requirement’s complex verification process prevented them from accessing coverage. Two years in, Georgia has enrolled just 8,000 of the 47,000 eligible beneficiaries it projected to enroll. 

Even beneficiaries who would be newly eligible for Medicaid without working have reported being denied benefits, since the law requires them to go through red tape to verify their exemption status actively.

There’s no reason to believe a federal work requirement will succeed where these state experiments have failed. OBBBA requires states to condition Medicaid eligibility for most adults in the Medicaid expansion population on performing 80 hours of work or community service monthly, unless they have a significant work-limiting disability, are participating in a substance use treatment program or serve as a caregiver for a young child or disabled person.

The Congressional Budget Office projects that the requirement will cause 4.8 million of the 18.5 million people officially subject to it to lose their coverage, with minimal effect on national employment.

However, 92% of Medicaid beneficiaries age 19 to 64 are either already working full-time or part-time or qualify for one of the requirements’ exemptions. This means that either budgetary savings are overstated or coverage losses cannot possibly be limited merely to beneficiaries who refuse to work. 

If CBO’s estimates are correct, more people are likely to lose coverage for which they remain eligible because they cannot overcome bureaucratic obstacles, rather than because they refuse to comply with a work requirement, just like in Arkansas and Georgia.

The CBO could also be underestimating potential coverage losses because Congress has allocated just $200 million for states to build the necessary administrative infrastructure. Georgia has already spent  $100 million implementing its work requirement and still frequently denies coverage due to administrative mistakes. 

Now, with only a fraction of the money, federal work requirements could cause bureaucratic dysfunction on an even greater scale.

Improving Medicaid’s integrity and efficiency is a worthwhile goal. Other provisions of OBBBA, such as the limitation on provider taxes that states use to artificially inflate federal matching funds, actually advance reform. The vast majority of budgetary savings from work requirements are likely to be realized by booting eligible beneficiaries from the program, not by getting them to work or revoking coverage from “lazy adults” who refuse to pursue it. 

Moreover, these savings will be less than one-tenth of the $4.1 trillion that OBBBA adds to our national debt over the next decade. There is simply no economic or fiscal rationale why these onerous work requirements are necessary.

Editor’s note: Ben Ritz is the vice president of policy development for the Progressive Policy Institute. He wrote this for InsideSources.com. Please send your comments to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.