Medicaid Work Requirements: Do They Work?

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Medicaid Work Requirements: Do They Work?

May 2019

Audrey Muntz

By Audrey Muntz(@AudreyMuntz)
Center for Health and Social Policy Ambassador


When I began a semester long research project on welfare work requirements for an Economics of U.S. Person-Based Anti-Poverty Policy in the Fall of 2018, I had no idea the complex evolution of the policies and politics surrounding this issue. 

By the time Clinton signed the Personal Responsibility and Work Opportunities and Reconciliation Act (PRWORA) of 1996, legislation famous for expanding work requirements and ending “welfare as we know it,” there had been numerous books, research studies, debates, and demonstration projects focused on welfare work requirements.  Replacing Aid to Families with Dependent Children (AFDC) with Temporary Assistance to Needy Families (TANF), this monumental legislation mandated that states have stricter work requirements, time limits, and sanctions for noncompliance while also ending cash assistance as an entitlement. However, this legislation was only one milestone in a debate that continues today. 

Welfare work requirements are once again making news.

The Trump administration has used multiple avenues, including an executive order, a proposed SNAP rule change, a White House Council of Economic Advisers report, and the President’s 2020 budget plan, to tout the benefits of work requirements and encourage their expansion in federal housing assistance, Medicaid, and the Supplemental Nutrition Assistance Program (SNAP).  Further, in early 2018, the Centers for Medicare and Medicaid Services (CMS) updated its waiver policy to permit states to seek approval for the addition of Medicaid work requirements. 

Since 2018, CMS has approved Medicaid work requirement waivers in eight states with seven more pending. However, these moves have not come without criticism and pushback.  In June 2018, a federal judge blocked Kentucky’s waiver contending that the Trump administration “never adequately considered whether Kentucky HEALTH (Helping to Engage and Achieve Long-Term Health) would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid.”  In late March 2019, this judge rejected the revised Kentucky waiver and also blocked the already implemented Arkansas waiver program, a decision these states will likely appeal. 

As the discussion over work requirements continues, I think it is important to reflect on what we have learned from TANF and consider the unique role that Medicaid plays in the lives of low-income households.  Although evaluating TANF proved difficult for numerous reasons, researchers found the following trends:

  • Caseloads declined and the number of eligible families receiving TANF decreased. 
  • Labor force participation and earnings of single mothers increased, although economists argue about what portion of this change was due to welfare reform versus the economy, changing labor force, and expansion of tax credit programs.
  • SNAP caseloads have grown and the gap between TANF and SNAP has increased.

Depending on your point of view these trends can tell a different story.  For me, they tell a story of employment success for some low-income families, a story of many families transitioning from having cash assistance to food stamps as an important part of their safety net, and a story of creating additional barriers to entry for vulnerable families. 

What might a similar story look like for Medicaid? Since the Arkansas work requirement enactment in June 2018, more than 18,000 enrollees lost coverage, due to either a failure to meet the requirements or a failure to report.  These enrollees were eligible to reapply in January 2019, but only 2,000 did. Losing insurance coverage for a period of time can be catastrophic for individuals with chronic ailments; and most recipients only alternative is to go without or to receive care at a free clinic or the emergency room.  These latter outcomes merely shift costs while also reducing access to more cost-efficient preventative care. Further, requiring recipients to churn on and off Medicaid disrupts their continuity of care, which can impact health outcomes and increase health costs over time.  Although Medicaid work requirements will move some individuals in to the workforce, it will likely also make it more difficult for some to reach the health stability necessary to do so.

As we tell this emerging story, we must remember a couple of key differences between TANF and the current Medicaid waivers.  First, TANF implementation affected households with dependent children, and many of the currently proposed Medicaid work requirements apply only to able bodied adults without dependents, a group for whom the impact of work requirements has been minimally researched.  Second, the waiver does not currently allow Medicaid funds to be used to help recipients find employment or cover additional barriers to employment (transportation, education, training), an important component of the design of state level TANF programs.  

As we consider adding work requirements to programs that help provide for millions of households’ most basic needs, food, housing and medical care, I think it is important for us to reflect on what we want our safety net to look like.  I prefer one that supports job readiness, education, and workforce development, but not at the cost of creating holes so large that our most vulnerable households fall through.

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Audrey Muntz is a second year Masters in Public Affairs student and 2018-2019 CHASP Ambassador at the LBJ School of Public Affairs. She is also the 2018-2019 President of the student group Social Policy Network (SPN). Audrey's policy interests are child welfare, poverty, housing, and homelessness. She is originally from Dallas and graduated with a BA in psychology from Dartmouth College. After college, she moved to San Francisco where she worked as the Children, Youth, and Volunteer Program Coordinator at an emergency and transitional shelter for families. She then managed volunteers and community relations at a multi-service agency for homeless youth. She continued work in volunteer management and community relations in the child life department at the University of San Francisco Benioff Children's Hospital. Upon returning to Texas, Audrey managed the statewide volunteer program for State Parks at Texas Parks and Wildlife Department prior to beginning her studies at the LBJ School. After graduation, Audrey hopes to work on affordable housing and economic development issues at the local level.

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The views, information, or opinions expressed by blog contributors are solely those of the individual authors and do not necessarily represent those of the Center for Health and Social Policy, the LBJ School of Public Affairs, or The University of Texas at Austin or affiliated employees.