5M would lose coverage with national Medicaid work requirements

National Medicaid work requirements would significantly reduce enrollment, affecting approximately 5 million beneficiaries, according to a new analysis.

The analysis from the Urban Institute and the Robert Wood Johnson Foundation found that between 4.6 and 5.2 million adults between 19 and 55 years would lose eligibility for federal Medicaid funding next year if Congress enacted work requirements for those enrolled through Medicaid expansion.

If state funds do not make up for the loss of federal funding, then these adults would lose Medicaid coverage, the analysis stated. The number of adults losing coverage would be between 34% to 39% of all expansion enrollees between 19 and 55 years old.

Only two states -- Arkansas and New Hampshire -- have implemented Medicaid work requirements, which the analysis used to estimate potential Medicaid coverage losses. It also modeled national work requirements on a 2023 House bill, which appears to be a starting point for current lawmakers contemplating ways to reduce Medicaid spending.

The 2023 bill would have imposed work requirements in Medicaid programs and withheld federal funding for Medicaid beneficiaries ages 10 to 55 years who did not qualify for an exemption or be involved in a work-related activity for at least 80 hours per month for three or more months during a calendar year.

The bill did not address which Medicaid eligibility groups, if any, would be excluded from the national work requirements. However, some officials interpreted the bill as applying to adults enrolled under expanded eligibility criteria that some states adopted after the Affordable Care Act.

"Even if work requirements are limited to expansion adults and states use available data to try to automatically identify those who are exempt or compliant, millions of Medicaid enrollees would lose coverage," Michael Karpman, principal research associate at the Urban Institute, said in a statement.

"Most of these adults would become uninsured and lose access to essential healthcare, including substance use disorder and mental health treatment, medications needed to manage chronic health conditions, and treatment for life-threatening illnesses such as cancer."

However, more than nine in 10 adults who would be subject to the work requirements are working, engaged in work-related activities or could qualify for exemptions, such as being a family caregiver, attending school or having a disability.

Medicaid enrollment losses would stem from low awareness or confusion about national work requirements, not an unwillingness to meet the work-related criteria, the analysis stated. Still, many of these adults would lose Medicaid coverage, even if lawmakers only apply federal work requirements to Medicaid expansion populations.

"Work requirements are a blunt tool that creates costly administrative red tape and separates eligible people from health coverage they rightfully qualify for," said Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation.

"Nearly all adults who gained coverage through Medicaid expansion already meet work requirements. People would not lose healthcare coverage because they are ineligible. They would lose coverage because of the bureaucratic burden the program would put on people across the country," Hempstead added.

GOP leaders have not proposed specific changes to federal Medicaid funding using work requirements. However, a recent KFF poll found that about six in 10 adults support work requirements in Medicaid.

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.