When Republicans were looking for ways to reduce the cost of their One Big Beautiful Bill (OBBB), one of the first offsets they incorporated was a federal work requirement for Medicaid.

Proponents claimed this “common-sense” policy would grow the economy by increasing employment and cut wasteful spending on “lazy,” able-bodied people who chose not to seek work.

However, in the states that have tried them, Medicaid work requirements did little to boost employment. Instead, they merely created complex layers of reporting and verification that made it difficult for people to maintain coverage, even if they were still eligible for coverage or would qualify for an exemption from work requirements.

Arkansas pioneered the first state-level work requirement for Medicaid beneficiaries in 2018, which lasted for less than a year before it was halted by a court order. Adults between the ages of 30 and 49 who were neither disabled nor pregnant were required to either work or perform community service to maintain coverage that they had already been granted by the Affordable Care Act’s expansion of Medicaid.

However, beneficiaries struggled to navigate the state’s onerous verification systems, resulting in 18,000 people losing their coverage soon after the requirement was implemented.

One recent analysis concluded that while this short-lived experiment had no measurable effect on employment rates, it did increase the uninsured rate for low-income working-age adults in the state by nearly one-fifth.

Georgia, the only state with a Medicaid work requirement still in effect, has experienced similarly disappointing results. When the state expanded Medicaid in 2023, it included a work requirement very similar to the one in Arkansas. While newly eligible Georgians could not lose the coverage they previously didn’t have, the requirement’s complex verification process prevented them from accessing coverage. Two years in, Georgia has enrolled just 8,000 of the 47,000 eligible beneficiaries it projected to enroll.

Even beneficiaries who would be newly eligible for Medicaid without working have reported being denied benefits, since the law requires them to go through red tape to verify their exemption status actively.

There’s no reason to believe a federal work requirement will succeed where these state experiments have failed. OBBB requires states to condition Medicaid eligibility for most adults in the Medicaid expansion population on performing 80 hours of work or community service monthly, unless they have a significant work-limiting disability, are participating in a substance use treatment program, or serve as a caregiver for a young child or disabled person. The Congressional Budget Office projects that the requirement will cause 4.8 million of the 18.5 million people officially subject to it to lose their coverage, with minimal effect on national employment.

However, 92 percent of Medicaid beneficiaries age 19 to 64 are either already working full-time or part-time or qualify for one of the requirements’ exemptions. This means that either budgetary savings are overstated or coverage losses cannot possibly be limited merely to beneficiaries who refuse to work.

If CBO’s estimates are correct, more people are likely to lose coverage for which they remain eligible because they cannot overcome bureaucratic obstacles, rather than because they refuse to comply with a work requirement, just like in Arkansas and Georgia.

The CBO could also be underestimating potential coverage losses because Congress has allocated just $200 million for states to build the necessary administrative infrastructure. Georgia has already spent $100 million implementing its work requirement and still frequently denies coverage due to administrative mistakes.

Now, with only a fraction of the money, federal work requirements could cause bureaucratic dysfunction on an even greater scale.

Improving Medicaid’s integrity and efficiency is a worthwhile goal. Other provisions of OBBB, such as the limitation on provider taxes that states use to artificially inflate federal matching funds, actually advance reform. The vast majority of budgetary savings from work requirements are likely to be realized by booting eligible beneficiaries from the program, not by getting them to work or revoking coverage from “lazy adults” who refuse to pursue it.

Moreover, these savings will be less than one-tenth of the $4.1 trillion that OBBB adds to our national debt over the next decade. There is simply no economic or fiscal rationale why these onerous work requirements are necessary.

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ABOUT THE WRITER

Ben Ritz is the vice president of policy development for the Progressive Policy Institute. He wrote this for InsideSources.com.

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