AARP Hearing Center
More than nine million individuals ages 50 to 64 obtain essential health coverage from Medicaid. Recent proposals to reduce the federal government’s spending on Medicaid have included requiring some Medicaid enrollees to demonstrate that they are working in order to receive coverage.
This report includes an analysis showing that the primary effect of work requirements would be loss of coverage due to confusing reporting demands. Further, it finds that work requirements would result in no notable increase in employment. It concludes that if work requirements are nevertheless added to Medicaid, the policy must maximize the likelihood that people who are either exempt from or already satisfying the requirements are able to remain on the program. The report outlines five policies that would mitigate the loss of coverage under work requirements.
How does a work requirement work?
While the details vary, past proposals for work requirements have four primary elements: who is subject to it; who is exempt; how the requirement is satisfied; and the consequences of failing to satisfy the requirement.
For example, in 2023, the House of Representatives passed the Limit, Save, Grow Act, which required states to impose Medicaid work requirements. In that legislation, Medicaid enrollees ages 19 to 55 were subject to the requirement. Exemptions were available for various reasons, including being “physically or mentally unfit for employment, as determined by a physician or other medical professional” or caring for “children or incapacitated individuals.” The requirement could be met with 80 hours of work, community service, or a work program during a month. The consequence of failure to meet the work requirement for three consecutive months was a month of disenrollment.
How will work requirements affect Medicaid enrollees ages 50 and older?
Even without knowing the details of how work requirements will be implemented in future legislation, it is possible to reach some conclusions based on experiences in states that have implemented them.
Millions of current Medicaid enrollees age 50+ will either be exempt from work requirements or are already working. Some will find it easy to demonstrate their compliance with the new rules, many others will not, particularly family caregivers and people whose work is unstable or irregular. For all these enrollees, the primary effect of a work requirement would be paperwork: collecting and submitting the paperwork required by the Medicaid agency to demonstrate that they qualify for an exemption or are satisfying the work requirement.
Meanwhile, imposing work requirements is unlikely to significantly increase the numbers of those who work. The Congressional Budget Office (CBO) projected that the Limit, Save, Grow Act would not increase employment rates, or hours worked by Medicaid enrollees.
Policies to mitigate coverage loss
If work requirements are added to Medicaid, policymakers should adopt appropriate exemptions and maximize the likelihood people who are either exempt from the requirements or are satisfying them remain on the program: broad exemptions; maximum automation; robust outreach and education; reasonable processes and accommodations; and data transparency.
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