Medicaid Work Requirements Ignore Reality of Low-Wage Work

By Jessica Gehr

A select group of Republican senators have been working behind closed doors to craft a health care bill with no committee hearings or public input—and are planning to try to pass it as soon as next week. This comes after House Republicans rushed to pass their version, the American Health Care Act (AHCA), just hours after the updated bill text was released with no score by the independent Congressional Budget Office (CBO). The Senate is preparing to take a huge step backward from the important coverage and affordability gains made under the Affordable Care Act (ACA).

The unreleased Senate bill is reportedly almost identical to the devastating House-passed bill. Notably, it appears to undermine the core funding structure of Medicaid by changing the federal-state partnership to a per-capita cap. CBO estimated that the AHCA would shift $880 billion in Medicaid costs to the states over the next 10 years, effectively ending the Medicaid expansion starting in 2020 while also forcing states to ration care for tens of millions of low-income children, seniors, individuals with disabilities, and others who rely on the program. The AHCA also includes a provision that would allow states to require Medicaid recipients to work to receive health coverage unless they are pregnant, seniors, determined disabled by the state, or single parents of young children or children with disabilities. This work requirement policy makes this bill even worse.

A new CLASP brief, “Doubling Down: How Work Requirements in Public Benefit Programs Hurt Low-Wage Workers,” describes why work requirement policies are inconsistent with the realities of today’s low-wage jobs, which are characterized by changing, unpredictable schedules, lack of paid leave for personal or family health needs, and no health insurance.

Many jobs that once provided workers with economic security have been replaced by temporary, part-time, and other contingent employment arrangements. This means workers often have to rely on Medicaid to get health insurance for themselves and their families or face going uninsured. Just 12 percent of workers earning the lowest 10 percent of wages had employer-provided health insurance in 2016.

Requiring Medicaid recipients to work in order to receive health insurance is not only inhumane but also counterproductive. First, Medicaid is a crucial program that helps people get and stay healthy enough to find and keep work. Strong evidence shows that work requirements frequently lead to a loss of benefits, which only makes it harder to work. Second, there is little evidence that work requirements increase employment outcomes or reduce poverty. Finally, work requirements create an unnecessary burden for workers and state governments. Efforts to impose a Medicaid work requirement—legislatively or through waivers of federal requirements, as several states have recently proposed—reflect a profound misunderstanding of the realities of low-wage work and should be rejected.

The proposed requirement ignores the fact that low-wage workers often have little to no control over their work schedules—effectively punishing workers for the choices of their employer. This would cause workers to lose the health care coverage they depend on to stay healthy so they can be gainfully employed.

The Senate should halt any further consideration of a health care replacement bill that would take coverage away from millions and institute unnecessary work requirements that disregard the nature of low-wage work. Those concerned about low-income people must be vigilant and involved. The threat of work requirements extends beyond legislative action—four states have submitted waiver proposals that include a Medicaid work requirement. Instead of seeking these waivers, states should focus on improving employment outcomes by providing robust, voluntary programs and services that meet the needs of those employed in today’s labor market.

It is important to educate policymakers, lawmakers, health care providers, and the general public about who will be affected and how the changes in federal and state policy will be harmful. Decision makers and advocates must speak out to protect care for low-income and vulnerable populations.