Indiana lawmakers are considering legislation that would add a work requirement for enrollees in the state’s Medicaid expansion group.
In addition to multiple provisions ensuring regular Medicaid recipients in the state are truly eligible for coverage, Indiana Senate Bill 2 would require able-bodied, mentally fit enrollees above the federal poverty level to work an average of 20 hours per week or meet other requirements to retain eligibility for Medicaid in the Healthy Indiana Program (HIP), which expanded Medicaid coverage to them under provisions in the Affordable Care Act of 2010.
HIP has grown from 390,000 enrollees before the COVID-19 pandemic to more than 686,000 in December 2024. In addition to the work requirement, SB 2 would cap enrollment at 500,000.
The bill limits eligibility to those who are “working at least twenty (20) hours per week on a monthly average” or meet one or more other qualifying criteria, such as “participating in and complying with the requirements of a work program for at least twenty (20) hours per week,” doing volunteer work for at least twenty hours per week, participating in a workfare program,” or receiving unemployment compensation and complying with federal and state work requirements in that system.
Also eligible are those “in a substance use treatment and rehabilitation program,” those “medically certified as physically or mentally unfit for employment,” “pregnant or … a parent or caretaker responsible for the care of a dependent child less than six years of age,” “a parent or caretaker personally providing the care for a dependent child with a serious medical condition or a disability,” or have “been released from incarceration for less than ninety days.”
Senate Bill 2 would benefit all Indiana Medicaid recipients by slowing the program’s movement toward insolvency as skyrocketing Medicaid costs threaten to devour all discretionary spending in the state. Nearly two million people in Indiana were enrolled in Medicaid at the end of 2024, in a state of just under seven million people. Indiana ran a Medicaid budget shortfall of more than $1 billion in 2023 and is still struggling to recover. The cost of Medicaid in the state increased by more than $5 billion in the last four years. Medicaid is forecast to cost Indiana taxpayers $10 billion over the next two years.
In addition to shoring up the long-term viability of states’ Medicaid programs, work requirements help those who are receiving this aid, by assisting them in moving from government dependence to self-sufficiency. A well-paying job is the best way for people to lead happy, healthy, and productive lives. Those who become qualified for jobs that provide health coverage will receive better care and benefit from greater independence and consumer choice.
Work requirements are compassionate and beneficial to Medicaid recipients, researchers at the Buckeye Institute found, writing that implementing work requirements could do the following:
- Increase the lifetime earnings to close to $1 million for individuals who transition off of Medicaid;
- Increase lifetime earnings by more than $212,000 for women and more than $323,000 for men who remain on Medicaid for their entire working life; and
- Raise the hours worked per week by 22 hours for women (from 12 hours to 34 hours per week), and by 25 hours for men (from 13 hours to 38 hours per week), bringing Medicaid recipients well above the typical 20 hours per week requirement.
Medicaid recipients benefit from work requirements.
The following documents provide useful information about Medicaid work requirements.
In addition to requiring state administrators to perform regular, extensive checks to make sure that Medicaid enrollees continue to qualify for coverage, Indiana Senate Bill 2 would require able-bodied people between the ages of 15 and 64 to work at least 20 hours per week or meet other requirements to retain eligibility for Medicaid.
Healthy and Working: Benefits of Work Requirements for Medicaid Recipients
Researchers at the Buckeye Institute show that work requirements benefit Medicaid recipients by reducing the program’s inherent incentives not to work: remaining in the workforce provides much-greater income over time than an individual will receive if he or she leaves work or reduces weekly hours to avoid losing Medicaid coverage.
Ineligible Medicaid Enrollees Are Costing Taxpayers Billions
Hayden Dubois and Jonathan Ingram of the Foundation for Government Accountability detail the scale of improper Medicaid payments based on enrollment eligibility problems.
October 2024 Medicaid & CHIP Enrollment Data Highlights
The Centers for Medicare and Medicaid services provides a snapshot of Medicaid and CHIP enrollment and of eligibility operations.
American Health Care Plan: State Solutions
Researchers from The Heartland Institute explain what states can do to make health care more accessible and affordable while awaiting a comprehensive federal plan to replace the current outdated, wasteful, access-denying, government-warped health care system. The authors recommend states take steps to verify Medicaid eligibility of program recipients and to require able-bodied recipients to work or perform other qualifying activities.
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 and other topics, visit the Health Care News website and The Heartland Institute’s website.
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S. T. Karnick
S. T. Karnick is a Senior Fellow at The Heartland Institute.
S. T. Karnick is a senior fellow and director of publications for The Heartland Institute.
