That bill would have mandated work or community service for people aged 19-55 who were not already working, disabled, in school, caring for a relative or undergoing rehabilitation for substance use.
The House GOP estimates Medicaid work requirements would reduce federal spending by $100 billion over 10 years. Republicans aim to reduce federal healthcare expenditures by up to $880 billion over that time period, the bulk of which is likely to come from Medicaid because Trump declared Medicare off-limits.
At the same time Republican leaders insist that efforts to cut the healthcare program for people with low incomes, people with disabilities and older adults in nursing homes would not harm those "deserving" of help.
"Everybody is committed to preserving Medicaid benefits for those who desperately need it, who deserve it and qualify for it," House Speaker Mike Johnson (R-La.) said after the House passed the first version of the fiscal 2025 budget resolution in February.
Yet limited real-word experience suggests that Medicaid work requirements don't promote employment or save large sums of money, but do cause many enrollees to lose coverage, such as what happened in Arkansas in 2018 and 2019. The first Trump administration invited states to implement work requirements, but President Joe Biden adopted the opposite position and courts blocked many state programs.
Using work requirements as a way to save money may also prove difficult because the policy would apply to few people.
There were 26.1 million adults enrolled in Medicaid who do not receive disability benefits or qualify for Medicare as of March, according to an analysis of Centers for Medicare and Medicaid Services data published by the healthcare research institution KFF.
Of those, 44% work full-time, 20% work part-time, and 29% aren't working because they are students, caring for a family member or are ill. The remaining 8% cite retirement, inability to find work or other reasons for not having a job.
That amounts to just over 2 million people nationwide who would be subject to work requirements under previous proposals and state programs, although many more would have to prove they are working.
Implementing work requirements that would disenroll people for noncompliance may actually make it harder for people to find and keep jobs, said Amaya Diana, a policy analyst at the KFF Program on Medicaid and the Uninsured. "Research does show that access to affordable health insurance and care promotes an individual's ability to obtain and maintain employment," she said.
Arkansas and Georgia
In Arkansas and Georgia, which is the only state with a type of work requirement in place, experience has shown that limiting access to Medicaid doesn't eliminate the need for medical care, said Robin Rudowitz, director of the KFF Program on Medicaid and the Uninsured. The difference is that there's no one to pay the bills when they get it, she said.
"If individuals lose insurance, if they still have healthcare needs — particularly emergency or acute needs — they are likely to still need to seek care. And then without insurance coverage, basically, there would either be uncompensated care for hospitals or uninsured patients for community health centers," said Rudowitz, who visited Arkansas to research its since-shuttered program.
"The policies were pretty confusing for enrollees, and there were no indications of increases in employment," Rudowitz said.
Some 18,000 people lost coverage in Arkansas during that time, including many who qualified but were unable to navigate the bureaucracy, before courts shut the effort down. Many people who should have been eligible got bumped purely over reporting issues, especially beneficiaries with chronic illnesses and other issues that made compliance difficult.
This isn't stopping Arkansas from trying again. The state submitted a new Medicaid 1115 waiver request for work requirements to CMS eight days after Trump returned to the White House.
The work requirements in Georgia's "Pathways to Coverage" program aren't faring any better, said Joan Alker, executive director of the Georgetown University Center for Children and Families. Georgia's waiver, which CMS approved during the first Trump administration, expires Sept. 30 and the state is seeking to renew it.
But while Georgia anticipated 100,000 participants in Pathways to Coverage, it reported this month that it has just 4,903. That meager enrollment is the product of spending heavily to have Deloitte Consulting build a verification system that Georgia hasn't actually used to enforce work requirements, Alker said.
"The track record there is that it's proved to be pathways to profit for Deloitte, but not pathways to coverage for Georgians," Alker said. "Deloitte has gotten millions of dollars of contracts to set up complicated websites and reporting requirements." The state has spent $86 million on the effort, with the bulk going to the consulting company, the investigative journalism outlet ProPublica reported in February.
Arkansas officials said they considered the problems from the first attempt when devising their new plan.
"We have worked to design this amendment taking into account lessons learned from previous work requirements," Arkansas Medicaid Director Janet Mann said when Gov. Sarah Huckabee Sanders (R) announced the new work requirements proposal Jan. 28.
Without a new law explicitly authorizing Medicaid work requirements, states could again run into legal challenges. The Biden administration asserted that attaching work requirements to Medicaid is not permitted under statute and undermines Medicaid's mission to provide health coverage. Many courts agreed.
Sanders said the amended plan would avoid that problem by leaving people enrolled, but suspending benefits for people who are not "on track" with community service, school or work requirements. These beneficiaries would be offered "success coaching" to stay enrolled and craft "personal development" plans allowing them to comply, Mann said.
Arkansas also contends it has addressed the bureaucratic and logistical obstacles to meeting the work requirement, Mann said. Rather than mandating that enrollees report their work hours, for instance, the state will use its own records, conduct audits and perform outreach, she said.
"We focused on the importance of providing clear communication through multiple means, simplicity in design and the need for personal interaction rather than the overreliance on technology," Mann said.
Diana said it is too soon to assess whether the new version would perform better. "It would still be suspending benefits for individuals who do not meet these requirements, and there's still potential issues for those who fell through the cracks in the first go-around — those with chronic conditions and so on," she said.
Provider implications
Whether any of these pitfalls concern Capitol Hill Republicans and whether they have ideas about making the policy effective is unknown to the public. Congress has not held hearings on the issue, even though committees plan to draft the tax-and-spending-cuts package in early May. Johnson aims to complete work on the legislation by the Memorial Day break, which runs May 23 through June 2.
Beyond the potential loss of health coverage for millions, Alker said Congress should consider the impact on providers, which goes beyond uncompensated care.
Providers also would likely face difficult reporting requirements of their own, perhaps even having to certify whether a jobless patient is sufficiently disabled to continue getting coverage. "Those are going to require a doctor's note," Alker said.
This presents a moral hazard to healthcare providers, Alker said. "Their decision may result in their patient losing their health insurance, which creates very real opportunities for them to violate their ethical obligations to their patients," she said.
Health insurance companies that administer Medicaid benefits also could confront fluctuating payments from states that set monthly outlays on a per-person basis. People cycling on and off the program would make revenue less certain. That, in turn, could hamper providers, Alker said.
"This could create a lot of havoc for providers and hospitals, both in terms of possibly losing payment retrospectively [and] creating enormous paperwork burdens," Alker said.
Medicaid is a joint federal-state program and states carry out most administrative functions, so Congress may not specify exactly how work requirements would be designed.
Dedicating federal money to job assistance programs could help, Rudowitz said. The Congressional Budget Office reported in 2022 that work requirements paired with job supports could be more effective. But spending additional money on social programs runs counter to the GOP's policy agenda.
"If the goal is to try to increase work and connect people with with work programs, there are things that states can do, but of course, Medicaid does not really pay for any of the things that would be typically thought of as work supports," Rudowitz said.
