Congress is considering implementing work requirements for Medicaid. This reform could help Congress achieve its goal of reducing federal expenditures and simultaneously strengthen the incentive for Medicaid recipients to work. At the same time, individuals who do not comply with the work requirement may lose health insurance coverage.
Underlying the policy debate is the extent to which Medicaid recipients already work. On the one hand, if the vast majority of non-disabled working age Medicaid recipients already work, then imposing a work requirement may achieve little cost savings and serve mostly to impose administrative burdens on an already compliant pool of recipients. On the other hand, if many do not work, then work requirements may meaningfully reduce federal spending as recipients gain employment and obtain private health insurance, or potentially lose health insurance coverage if they fail to comply with the work requirement.
To shed light on this question, I estimated the share of non-disabled working age individuals without children who worked at least 80 hours in December 2022. This is the population most likely to be targeted for a work requirement. In addition, an 80 hour minimum monthly work threshold would be consistent with previous Medicaid work requirement demonstrations as well as existing work requirements in the Supplemental Nutrition Assistance Program. The United States unemployment rate was 3.5 percent in December 2022, near historic lows, and thus job availability was likely high even for the low-income population eligible for Medicaid.
In December 2022, 44 percent of non-disabled working age Medicaid recipients without children worked at least 80 hours. For comparison, 72 percent of non-disabled working age adults without children who do not receive Medicaid worked at least 80 hours in the same month.
Figure 1 reports the same share broken down by age. At each age presented, Medicaid recipients were substantially less likely than non-Medicaid recipients to work at least 80 hours during the month. Focusing exclusively on prime working ages of 25 to 54, the share working at least 80 hours was 51 percent among Medicaid recipients and 84 percent among non-Medicaid recipients.
Figure 1. Share of non-disabled adults without children who worked at least 80 hours in December 2022, by age and Medicaid receipt
Figure 2 reports the number of Medicaid recipients by age group. As of December 2022 there were 19.6 million Medicaid recipients between the ages of 18 and 64 who were not disabled and did not have children, and 8.8 million between the ages of 25 and 54. Together, Figure 1 and Figure 2 suggest that Medicaid work requirements would target a large number of recipients, many of whom do not currently work a sufficient number of hours to comply. Thus, work requirements could have important effects on Medicaid expenditures, coverage and employment.
Figure 2. Millions of non-disabled adults without children in December 2022, by age and Medicaid receipt
It is also worth emphasizing that most non-disabled working age adults without children do not receive Medicaid, shown by the grey bars in Figure 2. Thus, statistics related to the work behavior of all individuals within a given age range may not represent the much smaller subset with Medicaid coverage who would be directly affected by Medicaid work requirements.
The conclusion that most non-disabled working age adults without children do not work enough to meet a work requirement appears to contrast with the conclusions of some similar analyses, which suggest that most Medicaid recipients who can work, do work. One reason for the discrepancy is that those analyses consider whether Medicaid recipients worked at least some point during an entire year. Because work requirements are typically based on monthly work behavior, I consider whether individuals who receive Medicaid in a given month work in that same month. I also rely on an 80 hour per month work threshold, based on the likely criterion for a Medicaid work requirement. Finally, I rely on data from the Survey of Income and Program Participation, which in addition to reporting monthly program participation and employment, is regarded as more accurately gauging participation in programs like Medicaid and disability programs, compared to commonly used data sources like the Current Population Survey.
There are many factors policymakers should consider when determining whether to institute a Medicaid work requirement, the form it should take, and to whom it should apply. For example, such factors should include the impact of a work requirement on employment, the value to the recipient and society of the health insurance, and the public cost of coverage. What should be clear, however, is that most non-disabled working age Medicaid recipients without children do not currently work a sufficient number of hours each month, and they work at much lower rates than non-Medicaid recipients. A work requirement focused on this population would be impactful.
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