Rules on Work Requirements

Work requirements are not part of Medicaid law. Nevertheless, some states have filed waiver requests asking to link adult enrollees’ eligibility,  benefit levels, or cost-sharing obligations to their work status.  Adding a work or community service requirement would make it harder for many individuals to get health coverage, would fundamentally change the nature of Medicaid, and there is no evidence such a requirement would improve employment among those eligible for Medicaid.  

The purpose of Section 1115 waivers is to allow the Secretary of Health and Human Services (HHS) to approve projects that promote the objective of the Medicaid program, which is to provide medical assistance to low-income individuals. Work requirements are not related to "providing medical assistance" but rather erect a barrier between Medicaid eligible individuals and care. 

The Secretary is permitted to waive certain rules related to eligibility under Section 1115, but is not allowed to add entirely new requirements—such as a work requirement. Adding such a criterion must be undertaken by Congress through the legislative process.
 

Arguments for keeping work and job search requirements out of Medicaid 

HHS does not have the legal authority to link Medicaid eligibility or benefits to work status. 

  • HHS cannot approve provisions linking Medicaid to employment: CMS has denied state requests to add work or job search requirements to Medicaid. The Obama administration denied Indiana’s and Arizona’s request to include a work requirement in its Medicaid expansion program. CMS stated: "While states may promote employment through state programs operated outside of the demonstration, [including this in a Medicaid waiver] is not permitted under the Medicaid program." 
  • The mere fact of a relationship between work or community service and health does not create a sufficient connection to legally justify use of Medicaid waiver authority that renders otherwise eligible people uninsured. There is an endless list of items and activities related to health–food, clean air, and clean water. Medicaid eligibility cannot be conditioned upon each and every issue that affects health.
  • While the Medicaid statue references “independence” in its statement of purpose in Section 1901 of the Medicaid Act, this independence is directly related physical rehabilitation and not employment. States may try to use the word “independence” in Section 1901 as a way to justify work as a means of “independence” from public programs. It is clear from section 1901 that the term “independence” is referring to improved physical function that can be achieved through medical rehabilitation services. A review of legislative history that this construction—linking “independence” in the statute to “independence from public programs”—is alien to Sec. 1901.

Work requirements aren’t necessary: most non-disabled adult Medicaid enrollees who would be helped by Medicaid are already working.

  • A work requirement isn't needed—most who would benefit are already working: Eight in ten non-disabled, non-elderly adults live in families where at least one member works, and sixty percent work themselves. Of those who are not working, more than one-third reported illness or disability as the primary reason for not working. Another thirty percent cited caretaking obligations as an impediment to work.
  • Many who do not have a formal job are working hard outside the labor market: Among those who don't have a formal job, nearly half are working outside the labor market—they are taking care of a relative (e.g., a child or parent) or attending school.  It isn't good policy to require people who are working hard to get an education or take care of a family member to get a formal job in order to get health insurance. 

A work requirement wouldn't necessarily increase workforce participation among those gaining coverage.

  • Denying health coverage will not help people find a job: Work requirements in the Temporary Assistance for Needy Families (TANF) program have not been shown to increase long-term employment among participants or to reduce poverty.  In fact, individuals with the most significant barriers to employment often do not find work.
  • Giving people Medicaid coverage helps them get and keep good jobs. Locking them out could make it harder for unemployed people to find work: In surveying beneficiaries of the Medicaid expansion, Ohio reported that three-quarters of beneficiaries who were looking for work said Medicaid made it easier for them to do so. For those who were currently working, more than half said that Medicaid made it easier to keep their jobs.

It would increase the ranks of the uninsured leaving people less healthy and less able to work.

  • The uninsured are less likely than those with insurance to get preventive care or treatment for major health conditions and chronic diseases. People without insurance are more likely to delay care and experience declines in their overall health. Poor health can make it harder for people to work.
  • Increased uninsured could increase health care costs overall: People who lose Medicaid coverage because they don’t meet a work requirement will still get sick. They will still need medical care. Their care may even cost more—because people without insurance often delay care, they are more likely to be hospitalized for avoidable health problems.

A work requirement can be at cross-purposes to increased financial security and employment—cutting people off coverage can make it harder for them to attain financial security and even get and keep a job. 

  • Individuals covered through Medicaid report less financial stress, less depression, and greater financial security than similarly situated individuals who are uninsured: Studies comparing low-income residents in Medicaid expansion and non-expansion states found that expanding Medicaid is associated with lower rates of borrowing, unpaid bills, credit card debt, debts sent to collections, and medical bankruptcy.
  • Stress and financial strain can affect individuals’ ability to get or maintain employment: Financial stress can affect job performance. That can make it harder for individuals to get or keep a job. 

A community service requirement is as bad as a work requirement.

  • A community service requirement forces low-income people to work for a non-monetary benefit. In economically challenged areas where unemployment is high and jobs are scarce, forcing people to work for free could disrupt fragile labor markets.
  • A community service requirement may violate labor laws. A waiver that requires work or community services may run afoul of the Fair Labor Standards Act. In areas where unemployment is high and jobs are scarce, individuals may have no option but to engage in unpaid community service in exchange for Medicaid coverage—a non-cash benefit that pays providers, not individuals, and that individuals may only use sporadically. The Fair Labor Standards Act establishes a minimum wage for work performed.  

Tracking work and job search activities will add administrative costs.

  • A work requirement can be expensive to administer: Tracking enrollees' work status or participation in job search activities creates additional administrative and state costs. States report that tracking work requirements in other programs (such as TANF) is time consuming for caseworkers and difficult to administer. 

If a work requirement becomes part of a waiver: Alternatives and working to change the program.

States with Work Requirement Waiver Element


Arizona


Indiana
 


Kentucky*
 


Maine*
 


Utah*


Wisconsin*

*Waiver Pending Approval

As of August 2017, work requirements had not been approved in any Medicaid program. For the reasons outlined above, work requirements are not consistent with the goals and objectives of the Medicaid program, are outside of the Secretary’s waiver authority, and may violate other laws. 

However, if a work requirement is proposed as part of a waiver, advocates should work to change the work requirements to voluntary work training program that would not be in conflict with Medicaid or other laws.  If a work requirement is approved as part of a waiver, advocates have an important role to play in collecting data and making the case to have the requirements removed.  

Options in lieu of a work requirement

Suggest a state specific study of unemployment among the Medicaid population. 

  • An in-depth study should help the state develop a true evidence base and make it better equipped to create a successful work support program that is legal. Work requirements are a blunt tool that do not address actual barriers to work. This approach would be built on an understanding of barriers to work in various regions of the state and an understanding of what has and has not worked in other state programs to address barriers to work. It would be designed to provide targeted and appropriate support based on individual circumstances and acknowledging regional barriers to work including transportation, education and child care

Base any program on referrals to job search resources or work supports programs

  • Evidence shows work supports programs are better at promoting sustained employment than punitive work requirements. A study of women receiving welfare found that work supports programs like post-secondary or training programs were more successful at helping them find and maintain work when compared to work search requirements.
  • Give Medicaid enrollees information on job-search resources at application: New Hampshire's Medicaid expansion legislation refers unemployed enrollees to a state-run job search program rather than making eligibility contingent on work status. 
  • Don't have any penalties. Voluntary programs have been shown to be more successful than mandatory job search programs. Program participation should be voluntary with no non-participation penalties and no penalties if individuals cannot find a job. The voluntary employment program Jobs-Plus for public housing residents significantly increased earnings for residents and increased employment for groups with historically low labor-force participation.

If a work requirement is part of a waiver, start making the case to change the program.

  • Include a rigorous and objective evaluation of the program: Make sure frequent and objective evaluation is part of the program: It's important to understand how work requirements affect enrollment, retention, and administrative costs. An independent federal evaluation in addition to any required state evaluations should be a non-negotiable.  In addition to any state or federal evaluations, evaluations from sources that are widely trusted in the state (such as universities or state research organizations) can be helpful. 
  • Collect evidence of the impact on consumers: Legislation and waivers can be modified. Document the impact of the work requirement on enrollees' access to care and program costs. Use stories from enrollees and providers to help build your case to remote work requirements. Consumers are also potential plaintiffs in litigation making collecting stories particularly important. 
  • Plan a campaign with a broad coalition: Reach out to other groups that might be affected by premiums, such as providers, health plans, and businesses whose employees might lose coverage. Build a coalition to advocate for program changes.