Senior Policy Analyst
President Trump’s new budget would take Medicaid coverage away from adults nationwide if they don’t meet a work requirement, which the Kaiser Family Foundation’s prior estimates show could cost 1.4 million to 4 million people, if not more, their coverage. The proposal doubles down on the Administration’s unprecedented approval of state work requirement policies, and it comes in the face of new evidence of these policies’ harm. In Arkansas, the first state to implement such a policy, more than 1 in 5 people subject to the work requirement lost their Medicaid coverage in the first seven months that it was in effect.
The Administration estimates that the proposal would cut federal Medicaid spending by $130 billion over ten years. That would translate into about 1.7 million people losing Medicaid coverage starting in 2021, based on average federal Medicaid spending for an adult enrolled through the Affordable Care Act’s Medicaid expansion. And the losses could be even higher: imposing Medicaid work requirements nationwide would cause 1.4 million to 4.0 million people to lose coverage, according to Kaiser estimates that assumed a smaller share of people would lose coverage than has happened so far in Arkansas.
The vast majority of Medicaid beneficiaries are working or have significant barriers to work. Taking coverage away from people who don’t meet a work requirement would cause many low-income adults to lose health coverage, including people who are working or can’t work due to mental illness, opioid or other substance use disorders, or serious chronic physical conditions, but who cannot overcome bureaucratic hurdles to document that they either meet work requirements or qualify for an exemption from them.
The budget argues that this policy will “improve the financial well-being of those receiving assistance.” But there’s no evidence that taking coverage away from people who don’t meet work requirements is helping people find jobs, much less improving their wellbeing. In Arkansas, at most a few hundred people may have found jobs due to the federal waiver, the evidence indicates, compared to the 18,000 people who lost coverage. That’s consistent with the research on work requirements in other federal programs: two decades of research on Temporary Assistance for Needy Families has shown no long-term increase in employment among people who are subject to work requirements, though some people who lose their benefits due to the policy are likelier to experience deep poverty.
Moreover, Medicaid is a work support: access to health care makes it easier for many people with chronic health conditions such as diabetes or opioid use disorders to find work and keep their job. By proposing drastic cuts to Medicaid and taking coverage away from people who don’t meet a work requirement, the President’s budget would threaten access to care for millions of people and could make it harder for many of them to work.
Losing coverage will worsen access to care, health, and financial security for many individuals and families. Medicaid has helped make millions healthier by improving access to preventive and primary care and protecting against (and providing care for) chronic conditions like diabetes. Medicaid coverage also produces long-term educational benefits for kids, including higher educational attainment, and improves families’ financial wellbeing by protecting them against high out-of-pocket medical costs.
Even beyond the harmful work requirement proposal, the Trump budget proposes to cut Medicaid and subsidies for low-income people to buy health coverage by $777 billion over ten years. The same proposal was shown to likely mean massive cuts in health coverage for many children, seniors, parents, and people with disabilities. The President’s proposed cuts, and work requirements, would jeopardize needed care for millions of individuals and families.