Research & Commentary: National Work Requirements for Medicaid

Published May 31, 2018

The skyrocketing growth in states’ Medicaid programs is placing a severe financial strain on state budgets, especially in states that expanded the program under the Affordable Care Act. Several states have sent waiver applications to the Centers for Medicare and Medicaid Services (CMS) to implement Medicaid reforms such as work requirements and cost-sharing. To date, CMS has approved Medicaid waivers for Arkansas, Indiana, Kentucky and New Hampshire.

A national work requirement standard for all state Medicaid programs, similar to the federal work requirements under the Supplemental Nutrition Assistance Program (SNAP), would be a viable alternative to this state-by-state approach.

Since the Personal Responsibility and Work Opportunity Reconciliation Act, also known as welfare reform was signed in 1996, low-income, able-bodied adults without children were limited to receiving food stamps for only three months in a three-year period—unless they fulfilled work requirements, which included employment or participation in a training or “workfare” program for at least 20 hours per week. The Obama administration gutted these requirements by granting waivers abandoning work requirements for many states. Fortunately, this trend is now beginning to reverse, with many states reemploying work requirements on their SNAP programs.

During a Senate panel on the Department of Health and Human Services (HHS) budget, a nationwide work requirement for Medicaid was discussed. HHS Secretary Alex Azar agreed that such a proposal at least deserves consideration. U.S. Senator John Neely Kennedy (R-LA) argues Congress should work with HHS to craft a program that would institute a mandatory requirement that Medicaid beneficiaries work 20 hours a week.

Sen. Kennedy introduced a similar proposal in 2017, the “Medicaid Reform and Personal Responsibility Act of 2017,” which would require “able-bodied adult enrollees” without dependents to work, go to school or perform community service for 20 hours a week in order to receive Medicaid benefits. These requirements would be applied to adults between the ages of 18 and 55, who have no dependents and are not disabled.

States that have enacted work requirements have experienced significant success in managing the rising cost of their welfare programs. In Maine, able-bodied adult recipients without dependent children are required to work, participate in a work program for 20 hours per week, or do community service for about six hours per week. Since the reforms were implemented, the caseload in Maine for this population quickly dropped by 80 percent, falling from 13,332 in December 2014 to 2,678 recipients in March 2015. Moreover, many individuals in Maine chose to leave the SNAP program rather than participate in training or community service, which means these individuals likely had other means of supporting themselves, according to The Heritage Foundation.

In The Heartland Institute’s 2015 Welfare Reform Report Card, the authors argue encouraging work affects more than just household income: “Research has shown that requiring work as a condition of receiving cash welfare isn’t something the system does to someone, but rather something done for someone.”

Sixty-four percent of American adults think childless, able-bodied adults in their state should be required to work as a condition for receiving Medicaid, according to a recent Rasmussen Reports national survey. Only 22 percent disagreed. Rasmussen Reports conducted the survey of 1,000 American Adults on January 14-15, 2018. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence.

Work requirements are a vital component for welfare programs because they ensure recipients do not become unnecessarily dependent on government aid. States should continue to pursue Medicaid waivers and the flexibility they provide, but a national work requirement would be an even better solution. In order to control costs and limit abuse, all welfare programs should require all able-bodied recipients to engage in work-related activities, and lawmakers should reform other government assistance programs that trap low-income Americans in poverty by incentivizing government dependence over work and self-reliance.

The following documents examine Medicaid reform in greater detail.

Research & Commentary: States Pursue Work Requirements for Medicaid–commentary-states-pursue-work-requirements-for-medicaid
Senior Policy Analyst Matthew Glans examines efforts by several states to add work requirements to their Medicaid programs. “Implementing Medicaid work requirements would be a good first step for Medicaid-expansion and non-expansion states toward helping to limit the rising costs of Medicaid,” Glans wrote.

The Oregon Experiment—Effects of Medicaid on Clinical Outcomes–effects-of-medicaid-on-clinical-outcomes
This article from The New England Journal of Medicine examines Medicaid outcomes in Oregon. Oregon gave researchers the opportunity to study the effects of being enrolled in Medicaid (compared to being uninsured) based on data from a randomized controlled trial, the “gold standard” of scientific research. The results showed no improvement in health for enrollees, but it did reveal better financial protections for patients and increased medical spending.

The Value of Introducing Work Requirements to Medicaid
Ben Gitis and Tara O’Neill Hayes of the American Action Forum examine the value of work requirements and argue more work requirements are needed in other safety-net programs, including in Medicaid.

Don’t Wait for Congress to Fix Health Care
Heartland Senior Policy Analyst Matthew Glans documents the failure of Medicaid to deliver quality care to the nation’s poor and disabled even as it drives health care spending to unsustainable heights. Glans argues states can follow the successful examples of Florida and Rhode Island to reform their Medicaid programs or submit even more ambitious requests for waivers to the Department of Health and Human Services, an option the Trump administration has encouraged.

Maine Food Stamp Work Requirement Cuts Non-Parent Caseload by 80 Percent
Robert Rector, Rachel Sheffield, and Kevin Dayaratna of The Heritage Foundation examine Maine’s food stamp reforms and discuss how they could act as a model for other states. “The Maine food stamp work requirement is sound public policy. Government should aid those in need, but welfare should not be a one-way handout. Able-bodied, nonelderly adults who receive cash, food, or housing assistance from the government should be required to work or prepare for work as a condition of receiving aid. Giving welfare to those who refuse to take steps to help themselves is unfair to taxpayers and fosters a harmful dependence among beneficiaries,” the authors wrote.

Welfare Reform Report Card: A State-by-State Analysis of Anti-Poverty Performance and Welfare Reform Policies
In 2015, The Heartland Institute published an updated version of its Welfare Reform Report Card. This report card compiles extensive data on five “inputs” and five “outputs” of state welfare and anti-poverty programs and assigns a final grade to each state for its welfare policies.

Food Stamp Dependence in the States
This interactive map from Foundation for Government Accountability shows what percentage of each state’s population is dependent on food stamps and how much it costs the state.

The Work Versus Welfare Tradeoff: 2013
The Cato Institute estimates the value of the full package of welfare benefits available to a typical recipient in each of the 50 states and the District of Columbia. The study found welfare benefits outpace the income most recipients can expect to earn from an entry-level job, and the income gap between welfare and work may actually have grown worse in recent years.

More States Enforce Food Stamp Work Requirements
With the U.S. economy emerging from the recession, food stamp work requirements suspended during the downturn will be reinstated in many states, says Jake Grovum notes in Stateline.

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News, The Heartland Institute’s website, and PolicyBot, Heartland’s free online research database. 

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