Work Requirements Might Cut Medicaid Spending. But at What Cost?

Republicans have long pushed to force working-age adults enrolled in Medicaid to show they are, in fact, working. 

Party members argue Medicaid, a taxpayer-funded program for people with low incomes and disabilities, shouldn’t cover Americans who aren’t actively trying to improve their financial situations. And Republicans are closer than ever to achieving a national work requirement, after winning the White House and both chambers of Congress, and unlocking a fast-track process to secure big spending cuts. 

A national Medicaid work requirement would slash spending by reducing the number of people covered. About 5 million adults could lose Medicaid coverage in 2026 if Congress imposes one. 

But here’s the thing: Most adults with Medicaid who can work are already working, or have some reason they can’t (such as they’re full-time caregivers). And the experiences of two states that have implemented work requirements reveal the hidden costs of adding those layers of bureaucracy.  

The nonpartisan U.S. Government Accountability Office confirmed last week that, at the request of three Democratic senators, it’ll examine the costs of running a work requirement program that Georgia spent millions of dollars to establish. 

The GAO investigation comes at a critical time, said Leo Cuello, a research professor at Georgetown University’s Center for Children and Families. 

“Congress seems to be pursuing cuts in Medicaid in a frenetic and rushed manner,” he said. The GAO report could outline for Congress the full extent of problems with work requirements “before they rush forward and do this without thinking.” 

The GAO previously found that work requirement programs can be extremely expensive for states to run — hundreds of millions of dollars, in some cases — and that federal officials failed to consider those costs when approving the programs, which are not allowed to increase Medicaid spending. 

States must introduce new technology and have enough staffers to verify whether enrollees meet complex eligibility requirements and to monitor their continued compliance. 

When Arkansas tried its work requirement program, which applied to those covered by Medicaid expansion, 18,000 people lost coverage in less than a year before a federal judge stopped it. 

So, yeah, a work requirement would cut federal spending, but potentially also anger voters. 

New polling released Thursday by KFF, a nonprofit health policy organization that includes KFF Health News, shows a majority of Americans — regardless of party — oppose funding cuts to Medicaid. 

Moderate Republicans are showing trepidation about changes to the program: House Republican Don Bacon, a key centrist from Nebraska, said this week he wouldn’t support more than half a trillion dollars in cuts to Medicaid over a decade. The House-passed version of a congressional budget resolution called for as much as $880 billion. 

While Donald Trump has emphasized his goal of rooting out waste in federal programs, he’s also asking Congress to extend his 2017 tax cuts and spend more on border security. 

That the opinion of one House member from Nebraska could draw so much attention this week underlines the hard math House Speaker Mike Johnson faces in passing those pricey priorities; he can’t lose more than a handful of GOP votes to get it done.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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