Kevin Corinth explores the potential impact of a Medicaid work requirement.

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. …

… 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.