Blog: Critique of a Flawed Analysis about Medicaid Work Requirements

A deeply flawed analysis by the Buckeye Institute claims that requiring low-income Medicaid beneficiaries to work, a policy promoted by the Trump Administration, will increase their incomes. Essentially, the report compares childless Medicaid adult participants who currently work more than 20 hours a week, the amount required by most work requirement states, with those who work less. Not surprisingly, they find that those who work more earn more, amounting to hundreds of thousands of dollars over a lifetime. The authors make an incredible assumption that work requirements would cause the difference between the two groups to disappear: “The estimated effect assumes that the treatment group changes their behavior to match that of the control group. We assume that all enrollees would satisfy the work requirement” (pg. 13, emphasis added). The authors thus assert that Medicaid participants who currently would not meet the work requirement will suddenly work as many hours as an average participant working more than half time. These assumptions, not facts, are not supported by prior research or logic.

The analysis also assumes that work patterns are static; those who are unemployed remain jobless forever and those who work always work the same amount. In reality, employment is volatile as low-wage adults move in and out of the work force. This naive assumption exaggerates the potential effects of work requirements. Recognition of the volatility of employment also underscores the problem that work requirements punish those who generally work but are unable to get the required 20 hours per week every week.

Previous research based on rigorous experimental studies of work requirements in welfare programs found that work requirements have, at best, a tepid and fading impact on employment and incomes. About half of Medicaid beneficiaries who might be subject to work requirements already work and others are already looking for work, but those who are not currently working  face substantial barriers, such has low education or poor health that does not meet the standard for a disability. Kentucky’s work requirement does almost nothing to remove these barriers, particularly given that the state is providing minimal funding for work training and CMS has prohibited states from using Medicaid funds for work supports, such as job training, child care and transportation assistance. When asked, few potential Medicaid beneficiaries say that work requirements would motivate them to change their job seeking efforts.

Second, in assuming that everyone will meet the requirement, the Buckeye Institute report ignores the clearest fact about work requirements: the harm caused when people lose benefits. It is abundantly clear that many beneficiaries are unable to meet Medicaid work requirements, as the 17,000 Arkansans who have lost Medicaid due to the work requirement thus far demonstrate. We recently estimated that 86,000 to 136,000 Kentuckians will be forced off Medicaid if work requirements go into effect. Similarly, recent experience with work requirements in the Supplemental Nutrition Assistance Program (SNAP, formerly the food stamp program) indicates that work requirements led hundreds of thousands of poor adults to lose nutrition assistance.

The Buckeye Institute authors argue that work requirements are necessary to address the incentive against further employment caused by Medicaid’s income limits. However, econometric research on the Affordable Care Act’s (ACA’s) Medicaid expansion has found no impacts on labor supply. Some studies conducted on Medicaid expansions prior to 2014 did associate expanded eligibility with reductions in labor supply, while others did not, but these studies were conducted prior to the availability of the ACA’s Health Insurance Marketplace coverage, which provides an additional option for insurance for those whose earnings rise above Medicaid levels.  

The available evidence strongly supports the conclusion that Medicaid work requirements harm human health and offer little to no economic benefits.  

Erin Brantley, MPH is a PhD candidate in Public Policy and Public Administration at the George Washington University Trachtenberg School as well as a senior research associate in the Milken Institute School of Public Health Department of Health Policy and Management.

Leighton Ku, PhD, MPH is a professor and director of the Center for Health Policy Research at the George Washington University’s Milken Institute School of Public Health.

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