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Medicaid Work Requirement Would Reduce Health Coverage, Increase Poverty

July 15, 2016 at 9:45 AM

The health care plan from House Republican leaders would prompt cuts in Medicaid eligibility and benefits that would grow over time.  The plan also would let states impose work requirements on Medicaid beneficiaries, which likely would further increase the number of poor people who are uninsured, as I describe in a new paper.

  • Work requirements tend to have a limited impact on employment, and they leave some of the most vulnerable people without needed resources.  Work requirements generally haven’t increased long-term employment, research on work requirements in other public assistance programs shows.  Studies also show that the share of families living in deep poverty — below half of the poverty line — rose in various programs that imposed work requirements.
  • Medicaid supports work.  The premise of imposing a work requirement is that people who aren’t working have chosen not to.  But work requirements’ track record in failing to increase stable employment over time suggests that most people who can work do so, and that for people facing major obstacles to employment, work requirements don’t help to overcome them.
  • A Medicaid work requirement would harm many who can’t work or who face major barriers to employment.  Many people rely on public assistance programs because they face significant health challenges or family responsibilities that limit their ability to work or reduce their ability to compete for jobs.  The principal likely effect of rigid work requirements in Medicaid would be to take away people’s health coverage, making it harder for some affected poor adults to work.  
  • A Medicaid work requirement would unravel some health reform gains.  Coverage gains due to Medicaid expansion would erode if a work requirement led to significant numbers of newly eligible adults losing coverage. 
  • A work requirement would be costly and burdensome for states.  States would have to create new programs and hire new staff to track beneficiaries’ employment status and cut off their health coverage if they didn’t meet the requirements.  The proposal to let states impose Medicaid work requirements also apparently comes with no added dollars for job training, other employment services, or child care assistance to help beneficiaries prepare for work or raise their earnings. 

There’s a better way.  Rather than erecting barriers to health care, policymakers should protect access to health coverage while giving low-income people a better chance of succeeding in the labor market by significantly strengthening effective education, training, and employment programs.               

Click here to read the full paper.