The Impact of Alabama’s Proposed Medicaid Work Requirement on Low-Income Families with Children

In This Report:

Key Findings

  • Alabama’s proposed work requirement and subsequent coverage losses would disproportionately affect mothers, African Americans and families living in rural communities. Many of these women will likely become uninsured as employer- sponsored insurance for low- wage workers is sparse.
  • The proposal creates a Catch-22: Any parent working the 20 to 35 hours required would make too much money to qualify for Medicaid—but likely not enough to afford private insurance. An analysis of the state’s estimates finds that 8,700 parents would be removed from Medicaid in the first year alone.
  • When their parents lose health coverage, children suffer. The families face increased debt, and children are less likely to visit the doctor regularly and more likely to become uninsured themselves. Children in these families are already disproportionately uninsured.

What is Alabama proposing to do?

Alabama is seeking federal permission through a Section 1115 Medicaid demonstration waiver to require parents and caregivers who rely on Medicaid to work 20 to 35 hours a week, prove they are looking or training for a job or do community service before receiving Medicaid. This proposal targets the very poorest and most vulnerable families with children in Alabama – many of whom will lose their health coverage.

If approved, according to the state’s own projections, this work requirement would result in as many as 8,700 of Alabama’s poorest residents losing their Medicaid coverage in the first year alone.1

Alabama is not the first state to seek a work requirement, but it is one of the first to do so without accepting the Medicaid expansion provided under the Affordable Care Act. That expansion allows adults with incomes slightly above the poverty line (138 percent of the federal poverty level) to receive Medicaid. In Alabama, only the poorest parents and caregivers, those making 18 percent of the poverty level or less—$3,740 a year for a family of three or about $312 a month—now qualify. That is the strictest eligibility requirement in the nation (along with Texas). Because Alabama has not expanded Medicaid, the work requirement would apply only to these extremely poor parents.

The new requirement would also affect workers using Transitional Medical Assistance (TMA) by cutting TMA benefits from 12 to six months despite eligibility rules, which ensure that these beneficiaries, by definition, are working more. This contradicts the stated goals of the state’s Section 1115 proposal and suggests that this aspect of the proposal is not about encouraging work but rather about cutting enrollment and Medicaid spending.

In addition, the proposal creates more red-tape and barriers to health coverage without any guarantee of new resources to help families overcome barriers to employment such as job training, transportation or childcare assistance so that very low-income mothers can fulfill their parental responsibilities while meeting the new restrictions on Medicaid coverage.

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  1. These estimates are based on Georgetown CCF calculations of enrollment assumptions included in the state’s budget neutrality estimates accompanying the Section 1115 proposal. For simplicity’s sake we have divided the enrollment estimates (which are presented as monthly estimates) by 12 to get an annual estimate of those losing coverage. In reality there may be more people who lose coverage for less than 12 months or a smaller number who lose coverage for longer.