Medicaid work requirements slated to cost the U.S. jobs

National Medicaid work requirements are on the table

The question of National Medicaid work requirements has been raised as Congress works to cut the federal deficit by $880 over the next decade. Most experts agree that Medicaid will need serious modifications for Congress to hit that number.

On the table are national Medicaid work requirements, or the idea that Medicaid enrollees will need to demonstrate that they work at least 20 hours per week, be engaged in community engagement or otherwise be exempted due to factors like caregiving responsibilities or disability.

Implementing such work requirements could have counteractive effects, the Commonwealth Fund researchers said.

For one thing, 64% of adults on Medicaid already work full or part time, while another 12% care for dependents, another 10% are disabled or in poor health and 7% are attending school. That shakes out to just 8% of enrollees who are not working or unable to find work.

Still, Medicaid work requirements are poised to cut coverage for millions of enrollees in both expansion and non-expansion states, the Commonwealth Fund said.

Work requirements effect coverage, GDP and jobs

By 2026, the Commonwealth Fund estimated anywhere from 4.6 to 5.2 million adults would lose their Medicaid coverage should work requirements be implemented. Those losses would mostly be the credit of complex paperwork or unclear guidelines, the organization said.

Coverage losses would have a cascading effect on related issues, including Medicaid Funding.

Currently, some Medicaid funds derive from federal matching that's based on enrollment. If coverage goes down, so too will that federal matching. The Commonwealth Fund researchers estimated that national work requirements would cost Medicaid expansion states between $33 and $46 billion in the first year of the mandates alone. Over the next decade, they would cost expansion states up to $504 billion.

The combined state-level effects on the GDP would likewise be damaging, the Commonwealth Fund explained.

In 2026 alone, national Medicaid work requirements would cause GDP declines of between $43 and $59 billion. Such declines would be due to lost spending and economic activity.

Similarly, the Commonwealth Fund found that national Medicaid work requirements would actually cause job losses across multiple sectors. The organization estimated anywhere from 322,000 and 449,000 eliminated jobs. That adds up to 206,000 jobs eliminated in the healthcare sector and another 242,000 in the retail, food service and construction industries.

Finally, there would also be between $3.2 and $4.4 billion less in tax revenue due to job and business losses.

Notably, these effects will be evident in both expansion and non-expansion states, the Commonwealth Fund said. For example, a state like Texas that did not opt to expand Medicaid would lose around $564 million and some 3,900 jobs from Medicaid work requirements, despite the fact that the state is not liable for direct Medicaid funding cuts.

"As a physician, I've seen how essential Medicaid is for people managing chronic conditions and trying to stay healthy. The evidence is clear -- these work requirement proposals would leave millions without coverage and increase the burden on already-overstretched health providers in every state," Joseph R. Betancourt, M.D., the president of the Commonwealth Fund, stated publicly.

"While improvements to Medicaid are welcome, undermining Medicaid through work requirements and cuts will take us in the wrong direction. They are a direct and serious threat to the health of millions of American families."

Sara Heath has reported news related to patient engagement and health equity since 2015.