Does Medicaid work with a work requirement?

Conditioning Medicaid eligibility on a work requirement could adversely affect beneficiaries from accessing needed health coverage in a manner that is contrary to the program’s purpose—providing health coverage. A Kaiser Family Foundation (KFF) issue brief examined the policy arguments related to Medicaid work requirements and the likely impacts of such requirements, in light of a March 14, 2017, CMS letter to state governors announcing that it will begin to use Section 1115 Medicaid expansion waivers to approve provisions related to “training, employment, and independence.”

Work requirements 

In the past several years, CMS has denied multiple requests to include work requirements as a condition of Medicaid eligibility. Those requests were made as part of states’ Section 1115 waiver requests to expand their Medicaid program under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The requests were denied on the premise that work requirements would not further program goals of promoting coverage and access. The March 14 letter signals a fundamental change in policy for CMS.

Policy

KFF opined that the reversion to work requirements in Medicaid turns the program into a cash welfare program instead of a program focused on health care coverage. Proponents of the work requirement argue that the expansion of the Medicaid program to able-bodied adults provides a disincentive for those adults to work. Some states have advocated the inclusion of work requirements to ensure that beneficiaries have “skin in the game.” Opponents of the work requirement note that good health is a precondition of work and often an inability to access care can serve, itself, as a barrier to obtaining work.

Statistics

The vast majority (80 percent) of Medicaid adults live in working families. Additionally, more than half (59 percent) of Medicaid adults are working themselves. Thus, KFF estimated that work requirements would have a narrow reach, impacting primarily those who are already at a disadvantage and not working due to disability or caregiver responsibilities.