The Trump administration recently agreed to let states get tough on Medicaid recipients who don’t work. Kentucky was the first to win approval of a plan to kick those who can work but don’t off the roles, and at least ten other states would like to do the same. Under these plans, in order to maintain coverage, able-bodied adults would have to prove that they are either employed in some form or are actively trying to be.
Will we now see a lot of lazy people among Medicaid’s almost 68 million recipients forced to join the workforce or lose their free health care? Almost certainly not. The new requirements would apply to only about one percent of all Medicaid beneficiaries.
Let’s look at who currently receives Medicaid and do some simple arithmetic. According to the nonprofit Kaiser Family Foundation, about 10% of Medicaid recipients are elderly, age 65 and older, and many of them are in nursing homes. About 48% are children, age 18 and younger. That leaves about 42% who are of working age and potentially subject to the requirements.
Of those would could be subject to the rules, 42% are already working full-time, and 18% are working part-time. Another 14% are not working due to illness or disability, six percent are in school, and 12% are caregivers for family members. All of them would be exempt.
That leaves just seven percent who could be forced to work. But most of them are already looking for jobs. When active job seekers are taken into account, less than three percent of adult beneficiaries would feel the effects of the new rules. That is about one percent of all Medicaid recipients.
Why would states go through the effort of implementing a new program to reach such a small percentage of the Medicaid population? Most state Medicaid agencies would have to hire new staff to administer the rules, and the cost could exceed any savings that could be achieved.
Advocates of work rules claim that putting people to work will make them healthier, regardless of any cost savings. But even if more than a tiny percentage of beneficiaries were involved, this claim has almost no evidence to support it.He
However, there may be another reason for the rules that has little to do with actually putting people to work and more to do with the way the requirements would be implemented. The rules would require most Medicaid recipients to prove that they are either exempt, can’t work, have a job, or are looking for one. Kentucky would require them to do this every month or risk losing benefits for the next six months.
Offering that proof could impose a substantial paperwork burden. Some beneficiaries, particularly the elderly and disabled, could find it especially difficult. Even able-bodied adults could find the documentation requirements challenging.
As a result, the work requirements could pare Medicaid roles of many more people than just those who are employable but not working. And many of those losing benefits would be people who desperately need health care and would now find it unobtainable. That would certainly save costs, but it’s a brutal way to do it.
Innovation to improve Medicaid is surely welcome. But work requirements would do nothing to improve the program while posing the risk that many people who are fully entitled to benefits would suffer real harm.