Medicaid Work Requirements: The Evidence and the Policy Debate

Medicaid work requirements, which condition health insurance coverage on meeting employment or other activity requirements, have been proposed in multiple states and implemented in a small number of them as part of Section 1115 waiver experiments. The policy has generated significant debate about its goals, its effects, and the legal authority for the federal government to approve state waivers that impose conditions not included in the Medicaid statute. The policy rationale offered for work requirements is that employment promotes health and that Medicaid coverage should be linked to productive activity. Proponents argue that Medicaid is intended as a support for people who are temporarily unable to work due to poverty or health conditions, not as a permanent benefit for working-age adults who choose not to work. They contend that requirements to work, search for work, volunteer, or attend job training can promote employment and ultimately reduce dependency on public programs. The empirical evidence on work requirements' effects is now fairly substantial, drawing primarily on the Arkansas implementation, which was the most extensive before courts halted it, and on analyses of work requirements in other contexts. The primary finding is consistent: work requirements reduce Medicaid enrollment substantially, primarily by creating administrative barriers that eligible individuals cannot navigate, rather than by actually increasing employment. In Arkansas, the state that implemented requirements most extensively beginning in 2018, enrollment dropped by more than 18,000 individuals within the first several months. Research by Benjamin Sommers and colleagues at Harvard found that the coverage losses were primarily among individuals who were working or who met exemption criteria but could not document their compliance through the reporting system, not among individuals who lacked qualifying activity. Critically, employment did not increase measurably following the requirements. The requirements reduced coverage without producing the intended increase in work. The population subject to Medicaid work requirements skews toward individuals with significant barriers to stable employment: people with chronic health conditions, caregiving responsibilities, unstable housing, transportation challenges, and other circumstances that make sustained employment difficult. These are populations for whom losing health coverage is particularly harmful, since their healthcare needs are often elevated. Research documents that coverage losses associated with work requirements increase rates of uncompensated care and emergency room use in ways that do not reduce overall system costs. Legal challenges to work requirements have succeeded in federal courts on administrative law grounds. Courts have found that the Department of Health and Human Services exceeded its statutory authority in approving waivers that impose conditions Congress did not include in the Medicaid statute. The Supreme Court declined to rule on the merits in a key case, allowing lower court rulings to stand. Subsequent administrations have taken different positions on whether to approve such waivers, with the policy oscillating based on which party controls the executive branch. The Trump administration approved multiple state work requirement waivers in its first term and has indicated intent to do so again in the second term. The Biden administration withdrew approvals for pending waivers and declined to approve new ones. States that had sought waivers under the Trump administration resubmitted them following the 2024 election, and the status of those applications has been closely monitored by Medicaid advocates. The broader policy question is what Medicaid is for and who it should serve. The Affordable Care Act expansion extended Medicaid to cover adults with incomes up to 138 percent of the federal poverty level, reaching a population that had not previously been covered. Work requirements effectively add conditions that Congress did not impose when it enacted this expansion, raising questions about whether executive waivers can appropriately modify statutory eligibility conditions. Healthcare researchers and public health advocates have consistently argued that the evidence does not support work requirements as a tool for improving health outcomes or promoting employment, and that the primary effect is coverage loss for vulnerable individuals without meaningful compensating benefits. The policy debate continues in the context of broader discussions about Medicaid's future, eligibility policy, and the appropriate scope of executive waiver authority.