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

March 20, 2018 Joan Alker, Phyllis Jordan, Olivia Pham, Karina Wagnerman

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. The state estimates that just under 15,000 parents would be removed from Medicaid by the fifth year of the proposal. This number is likely too low.
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.

(Updated August 23, 2018)

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, the work requirement would result in approximately 14,700 of Alabama’s poorest residents losing their Medicaid coverage by the fifth year of the plan. This number underestimates the potential impact of the proposal for two reasons. First, the number of parents who would “churn” on and off Medicaid and face periods without insurance is likely much higher. And second, some children would likely lose coverage alongside their parents, yet the state does not account for this.

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.