Study Finds No Change in Employment After Implementation of Medicaid Work Requirements

As of April 2019, 9 states received approval to implement work requirements in Medicaid, and 6 currently have applications pending. CMS believes that these requirements may promote better health and “help beneficiaries escape poverty”; however, critics of the requirements warn that such policies could lead to many people losing coverage.

In June 2018, Arkansas became the first state to implement such work requirements. The state notified Medicare beneficiaries aged 30 to 49 years by mail and informational fliers that they were required to work 80 hours per month, participate in other qualifying community engagement activities such as job training or community service, or meet criteria for an exemption (ie, pregnancy or disability). After 3 months of noncompliance or nonsubmission of reports proving the work requirements or exemptions within a year, beneficiaries were removed from Medicaid.

According to a study published today in the New England Journal of Medicine of the first quantitative evidence on the nation’s first work requirements in Medicaid, thousands of adults lost insurance coverage in the 6 months after the requirements were implemented, with no change in employment.

“The idea of work requirements is to get people into new jobs and private insurance. But in our study that didn’t happen. We didn’t find any employment changes and instead we see Medicaid coverage rates dropping and more people without health insurance—usually because the process itself was confusing or beneficiaries didn’t even know about the new requirements,” said Benjamin Sommers, MD, PhD, professor of health policy and economics at Harvard T.H. Chan School of Public Health, in a statement.

Researchers conducted a telephone survey in late 2018 among low-income residents aged 16 to 64 years. Half of the individuals who were surveyed were Arkansas residents, while the others were from comparator states, such as Kentucky, Louisiana, and Texas, that had not implemented work requirements.

The study identified that work requirements were associated with significant reductions in insurance coverage for those aged 30 to 49 years who were targeted by the policy, but not among individuals in other states not subjected to such rules. Although the state itself reported that instituting the policy led to 18,000 adults leaving Medicaid in late 2018, their reason for leaving was not clear. While defenders of the program have hypothesized that most potentially obtained coverage through new jobs, the study found that a large portion of this group had not gained other coverage and had in fact become uninsured.

“Many more states are considering work requirements, and the Trump administration has been eager to support that effort. With these sorts of broad policy changes, it’s really important to have evidence afterwards to see whether they’re working as intended. Based on our results so far in Arkansas, it doesn’t appear that this particular policy is accomplishing its goals,” said Sommers.

Furthermore, the study found that more than 95% of the low-income residents in Arkansas targeted by the policy were already meeting the work requirements or should have been able to meet the exemption criteria. However, the study revealed that one-third of this group had not heard of such a policy (largely evident among those who had achieved less than a high school degree), and only half were reporting the required information online to the state in order to keep their coverage. This was primarily due to confusion about the process itself or a lack of internet access.

“We found no significant changes in employment associated with the policy, and more than 95% of persons who were targeted by the policy already met the requirement or should have been exempt. Many Medicaid beneficiaries were unaware of the policy or were confused how to report their status to the state, which suggests that bureaucratic obstacles played a large role in coverage losses under the policy,” wrote the authors.

Reference

Sommers B, Goldman A, Blendon R, Orav J, Epstein A. Medicaid work requirements—–results from the first year in Arkansas [published online June 19, 2019]. N Engl J Med. doi: 10.1056/NEJMsr1901772.