Mythbusting: Medicaid and Work Requirements

Congressional Republicans are moving quickly to enact Donald Trump’s “big beautiful bill” that would cut spending on the social safety net and increase the military budget while delivering tax cuts that would overwhelmingly benefit the wealthy.

Some of the most important cuts will come from Medicaid – which provides health care coverage to X million Americans. The centerpiece of the Republican plan is to institute work requirements – a move that party leaders defend as a way to ensure that “able-bodied working-age adults” are out working and not obtaining health coverage that is intended for “the truly needy.”

These arguments rely on some key misconceptions about Medicaid recipients.

Most Working-Age People on Medicaid Already Work

The Republican plan relies on this notion that there are many people on Medicaid enjoying the health care benefits and simply choosing not to work. This is inaccurate. Nearly two-thirds of Medicaid beneficiaries who are of prime working age are already working; most of the others are caregivers, disabled, or in school.

In total, 92 percent of those with Medicaid coverage were in these categories; about 8 percent were not.

Medicaid is a crucial source of coverage for workers who are not covered by their employers. A new CEPR report finds that about 16 million workers are covered by Medicaid – that’s about 1 in 10 of all workers, many of whom are earning low wages.

Work Requirements Don’t Actually Increase Work

It might seem intuitive that requiring Medicaid recipients to work would increase work – but that is not necessarily the case. In fact, recent research documents that work requirements put in place in Arkansas did not actually increase employment. And one Congressional Budget Office (CBO) report pointed out, high rates of employment among Medicaid recipients make it difficult to effectively further increase employment rates.

Work Requirements Do One Thing: Reduce Benefits for those who are Eligible

The clearest outcome of work requirements is the creation of bureaucratic hurdles that serve to reduce access to healthcare for people who are eligible. When the Congressional Budget Office analyzed a previous House bill that would have instituted work requirements, they found they would have led many to lose coverage with “no change in employment or hours worked.” The state-level programs in Georgia and Arkansas have revealed similar patterns – eligible residents are not enrolling or losing benefits that they should be receiving, and the costs to administer these plans far outweigh the supposed benefits.

It is unclear how many millions of people will lose their Medicaid benefits if Congress eventually passes the current spending plan; the Congressional Budget Office estimates it could be over 8 million people. The Republican political strategy is to portray this as something other than a cut in benefits – but the evidence shows clearly that work requirements are a benefit cut under a different name.

This first appeared on CERP.

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