Medicaid Work Requirements Are a Short-Term Fix to a Long-Term Problem

Reason ^ | 7.1.2025 | Tosin Akintola

[Kazan]

Funding for Social Security, Medicaid, and Medicare accounted for 41 percent of federal spending in FY 2024. The One Big Beautiful Bill Act, which is expected to add $3.9 trillion to the federal deficit over the next 10 years, aims to rein in some entitlement spending by implementing work requirements for Medicaid recipients. However, these provisions could backfire by increasing administrative burdens and making the program less efficient.

Currently, the bill would require beneficiaries aged 19–64 who apply for Medicaid or who are enrolled through the Affordable Care Act expansion group to document 80 hours of work or qualifying activities per month. Previously, Medicaid eligibility was not contingent on meeting a work or reporting requirement. The Congressional Budget Office estimates that the work requirement provisions included in the bill could reduce federal spending by $344 billion (total Medicaid spending is estimated to be $655.9 billion in FY 2025) but result in 11.8 million more people being uninsured by 2034.

Most Medicaid recipients (92 percent) under the age of 65 already work full- or part-time jobs, according to KFF. The bill also includes exemptions from the requirements for certain adults, including parents of dependent children and those who are medically frail. These requirements would take effect nationally no later than December 31, 2026.

States have attempted to implement work requirements for their Medicaid programs, but have faced challenges to successful implementation. In 2018, when Arkansas attempted to implement similar Medicaid work requirements, confusion with paperwork resulted in 18,000 people losing health care, and there was no improvement in employment rates. Georgia's work requirement program, which began in 2023, spent $55 million verifying eligibility. It enrolled only 2.3 percent of the estimated 240,000 Georgians who were eligible for the program.

Marina Nitze, a crisis engineer whose firm, Layer Aleph, has worked on state unemployment systems, tells Reason, "Work requirements may sound like a good fraud prevention step, but implementing them is a nightmare that dramatically increases administrative burden and makes it much costlier to implement the program."

The bill allocates $100 million for all states and $50 million to the Department of Health and Human Services to overhaul their administrative systems and enforce these requirements. For a state like California, which spent over $236 million on private contracts to revamp its Employment Development Department during the COVID-19 pandemic, the amount could be inadequate and raises concerns about the financial strain the provision will place on states.

"The implementation is not properly funded. They've set a timeline to implement this that is entirely unrealistic, and state Medicaid directors are explicitly stating that," Pamela Herd, a professor of social policy at the University of Michigan, tells Reason.

Anna Bonelli, director of health policy for the Committee for a Responsible Federal Budget, echoes this sentiment. "This is a brand new endeavor, and it requires information that states don't typically track; there are all the startup costs that are involved in undertaking that kind of thing."

While the work requirements and eligibility rules aim to reduce Medicaid costs, they fail to address the program's larger issue: government intervention. When the government sets eligibility rules, price caps, or bureaucratic hurdles in health care, care becomes less accessible and less efficient. It places the burden of entitlement spending on states, resulting in an expanded bureaucracy and higher costs.

Jacob James Rich, policy analyst at Reason Foundation (the nonprofit that publishes this website), notes that market incentives reward innovation, curb waste, and align supply with demand. "Work requirements may be justifiable, but they will harm people. A better solution for Medicaid is to maximize market incentives, eliminate regulations that hinder health care, and provide access without market interference," he says.

Republican lawmakers claim their goal is to eradicate waste, fraud, and abuse in Medicaid. However, if enacted, the provisions in this bill could increase the administrative state and make the program less efficient. The answer to making Medicaid efficient lies in empowering the free market, not the government.

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TOPICS: News/Current Events
KEYWORDS: bbb; medicaid

[Lod881019]

Just to many republicans that want to keep Medicaid for illegals Donald should honestly become independent and take his voters with him.

[chajin]

Teddy Roosevelt did that, it’s how we got Woodrow Wilson.

[Texan5]

I remember when we had the welfare-to-work program started by Clinton and the repub congress-as a comp case manager, I think it worked very well. That idiot Obama undid it, and now here we are having to do congrssional magic tricks to get it going again...

[Tell It Right]

Funding for Social Security, Medicaid, and Medicare accounted for 41 percent of federal spending in FY 2024.

As the saying goes, the devil is in the details. Is the writer saying that the U.S. govt's general budget money is helping to fund SS, or is the writer including money paid to SS recipients from the SS fund that was funded by the workers and their employers as part of "federal spending". If it's the latter, then it's such a misleading statement I'd dare call it lying. The SS fund money paying out SS checks is nothing what virtually any reader would think is meant by "federal spending". But if it's the former, if there is money coming from the general budget to supplement SS, I'd be very much interested in knowing about that.

[Kazan]

Medicaid isn't welfare.

Healthcare costs have perverted by the system politicians have created. Third parties pay for virtually everything. Healthcare is devoid of market forces to keep prices down. And, thus, it is not affordable.

There are going to be all sorts of examples of someone kicked off Medicaid that most will believe was worthy of being on it.

The truly lazy 20-somethings won't bother getting working or getting healthcare. They will be running up huge bills at emergency rooms that they won't payback.

And, the author's points are accurate. More red tape will make the system less efficient and run up unexpected administrative costs.

Republicans are going end up owning the mess the comes out of all of this.

What they need to do is find a way to bring market forces back into healthcare to drive costs down so healthcare and insurance is affordable again.

[Texan5]

Because medicaid is taxpayer funded, it used to have a sliding fee scale-it did when I first began working with workers comp clients and insurers. It is now free and pretty much unregulated for any deadbeat who can fly under the radar and not get busted-ridiculous...

I certainly agree that the current healthcare system is a fustercluck-but we have to start somewhere small to get some sane market forces to see an opportunity-and suddenly yanking the mojados and other deadbeats off the govt tits will be an attention getter-and an excuse for some brutal audits from hell. I’ll take a little more confusion for awhile if it pisses the powers that be off enough to just say “bastante” and start digging into the whole mess.

Destroy it bit by bit, that way you don’t miss any moving parts like grift sources-I’d personally rather see it nuked from orbit, but that would cause way too much collateral damage-just my dos centavos...

[VanShuyten]

It’s not just illegals. My criminal nephew got disability for a “back problem”. He’s a grifter, and I hope this makes him do some real work.

[Lod881019]

That would be awesome the GOP is just a party of grandstanders who when a democrat is in office always cower in the corner

[ridesthemiles]

IT IS A START-—AND IT IS BETTER THAN ZERO

[ridesthemiles]

RUN OUT THE INVADERS -———AND LIGHTEN THE WORK LOAD, SISTER

[Fledermaus]

SS and Medicare are technically self funded. So that is sort of a lie.

[takebackaustin]

Please educate me how Medicaid isn’t welfare. Asking sincerely and respectfully.

MediCARE isn’t welfare because you paid for it, did you mean that? MedicAID qualification is based on low income, disability, and foster care based, right?

Is it not welfare because it is in kind medical care rather than money or food?

Thanks!

[Kazan]

It's not welfare because the cost of healthcare is so incredibly expensive because of the system of politicians created.

There are no market forces keeping healthcare costs down.

Sure, get a job and pay for food and rent. But, it's not always that easy to pay for healthcare insurance.

[ROCKLOBSTER]

Medicaid isn't welfare.

Of course it is.

[Trump Girl Kit Cat]

Do you pay premiums for Medicaid the same as you pay for Medicare??? I have no idea how the Medicaid system works!!!

[ROCKLOBSTER]

it's not always that easy to pay for healthcare insurance.

Health insurance is different from state to state, and all the RAT states have stupid public policy laws, and hence real expensive health insurance rates. "Underwriting" is not allowed. All comers, regardless of health, must be accepted and will pay the same or similar rates.

The socialists want to kill private health coverage so they can force everyone on "single payer" or government coverage, like Canada.

Most or all of the Red states have common-sense mandates that allow carriers to offer affordable premiums to healthy people, and alternate subsidized programs for high-risk patients.

[ROCKLOBSTER]

Do you pay premiums for Medicaid the same as you pay for Medicare?

Not as far as I know. It may also vary from state to state, as each state usually has a different name for MedicAid, and some may require a copay or small premium "contribution".

[Trump Girl Kit Cat]

Thank you!!!