We Just Checked and Medicaid Work Requirements are Still a Terrible Idea

Our world is constantly in flux and that can be stressful. But you can rest assured that Medicaid work requirements are a consistently and unalterably terrible idea. The years may pass, but some things never change.

Just a few short years ago, numerous experts weighed in on the expected harms associated with Medicaid work requirements. We blogged about the harms. We did estimates predicting the harms. Then we did some more estimates. And some more blogging.

Then, in late 2018, Arkansas briefly implemented a Medicaid work requirement, resulting in more than 18,000 people losing their health insurance. Just as the experts had predicted. It’s hard to point to stronger evidence than, well, actual unmitigated failure. And the Arkansas debacle didn’t increase employment, either.

And then the verdict came in on work requirements. Literally. Federal courts struck down work requirement approvals in numerous states (including Arkansas), finding that they contradicted the purpose of Medicaid and indeed were likely to reduce coverage.

The evidence here is not genuinely debatable.

But just in case you were wondering if anything has changed, let’s remember why Medicaid work requirements always were and are still a terrible idea for states to pursue. (There are so many reasons, we couldn’t even fit it in a top ten list.)

First of all, the Biden administration has indicated that it will not approve any new Medicaid work requirements, and in fact rescinded prior approvals. So, any state-imposed work requirement effort is simply a waste of time and resources.

Second, even if the Biden administration approved a state work requirement request (which it won’t!), a federal court might vacate the state’s approval, as happened repeatedly in recent years. Again, the state’s time and resources go down the drain.

Third, speaking of state resources, work requirements are very expensive to implement. For example, Kentucky estimated it would have cost them over $270 million dollars to implement work requirements. Ouch!

Fourth, do you know what all that state spending to implement work requirements gets you? Answer: a gigantic, brand-new roll of… red tape. The state will waste millions of dollars on contractors to monitor the work requirements, and working families will have to fill out loads of extra paperwork just to keep their health insurance – or to lose it, despite trying. Regardless of the “penalty” for noncompliance, many people will just get tripped up by the monthly administrative hassle.

Fifth, work requirements are also a waste of time and resources because the majority of Medicaid enrollees are already in working households. The data also shows that the minority that are not working usually have a good reason—such as they’re in school or caring for family.

Sixth, work requirements don’t actually increase work. Oops. Years of work requirements in other programs (such as TANF) and the Medicaid experience in Arkansas have produced negligible evidence that work requirements lead to lasting increases in employment.

Seventh, there is a simple reason work requirements don’t increase work: they don’t actually do anything to address the reasons people don’t work. You know, in reality. Evidence shows the reasons people don’t work are things like lack of child and family care, transportation, access to jobs, and job training, as well as disabling health conditions and (particularly in some rural areas) a history of opioid use or other SUD. Work requirements don’t help any of these people work—they just punish these families further.

Eighth, you know what does increase work? Medicaid expansion. Many people actually need health care in order to work. State data shows that Medicaid expansion helps people work and seek work. Improving access to Medicaid is a proven way to increase employment.

Ninth, work requirements actually hurt workers. Double oops! Work requirement proponents assume that all workers will be identified and keep their insurance. The reality is, there is no way for the state to identify all workers, and work requirements will cause many workers to lose their health insurance. When Arkansas briefly implemented work requirements, the data showed that 8-29% of the applicable population failed the work reporting, even though only 3-4% of them were non-workers who didn’t qualify for an exception. (The same thing was about to happen in New Hampshire too, when they paused their work requirements.)

Tenth, work requirements are also anti-family. Parents may be denied or have their coverage terminated because they are taking care of children—often because there is no available or affordable child care option. Some states may claim to offer an “exception” for such parents, but will fail to identify many parents providing child care and terminate them anyways. Georgia, which is about to implement a work requirement in July, hasn’t even bothered to offer a caregiving exception; presumably suggesting that parents should choose between health insurance or taking care of their kids? Parents in non-expansion states with a work requirement would also risk termination if they did try to add work hours.

Eleventh, work requirements will likely discriminate against individuals with disabilities and certain illnesses. For example, in Arkansas, exceptions processes for individuals with disabilities were complex and under-utilized, meaning eligible people with disabilities were vulnerable to termination. As with Arkansas, the exceptions process in New Hampshire led to excessive terminations that were likely impacting people with illnesses and disabilities.

Twelfth, when the state implements complex work requirement reporting systems, most enrollees won’t know about the requirements or whether they are subject to them, much less the exact process to report, so countless people won’t even know when or why their insurance was terminated. Any incentive structure intended to change behavior is predicated on people knowing about it and understanding it. It may be impossible, and certainly would be extremely expensive, to develop an adequate information campaign for the entire state population of potentially impacted individuals.

Thirteenth, work requirements are also destined to fail because they require the state to have two-way communication with all or a large part of the Medicaid population every month. As communication failures in Arkansas and New Hampshire demonstrated, the Medicaid population includes people with unstable housing or experiencing homelessness, inconsistent access to cell phones and the internet, and informal employment arrangements that change monthly. If you think monthly data matching and reporting in this context is possible, please email me about a fantastic bridge I have for sale.

Fourteenth, thousands (or millions) of people may lose their health insurance leading to worse health outcomes, reduced quality of life, and in some cases, death. Yeah, there’s that. In Arkansas, work didn’t go up, but uninsurance sure did. In Kentucky, the state’s own estimate predicted 96,000 people would lose insurance, while other experts estimated even higher numbers.

Fifteenth, thousands (or millions) of people losing coverage means millions of dollars of uncompensated care costs that will overwhelm health systems, particularly those in rural areas.

Ultimately, work requirements in Medicaid don’t work, cause people to lose coverage, may actually harm employment, and there’s no way to fix them. States and the federal government should be focused on expanding access to Medicaid and increasing access to supports, such as child care, to empower working families.

Leonardo Cuello is a Research Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.