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Medicaid Work Requirements Will Harm Direct Care Workers

By Jessica King (she/her) | August 17, 2023

Jessica King, Research and Evaluation Associate

Recently, federal budget negotiations have revived a dangerous policy proposal to institute work requirements for those receiving Medicaid. These requirements tie eligibility for Medicaid coverage to minimum weekly or monthly employment—such as 80 hours per month—for enrollees without exemptions. They have been proposed as a way to curb the national debt by reducing Medicaid enrollment. Such work requirements—which many states are also considering—pose a considerable threat to the health of direct care workers and the stability of this essential workforce.

What are “Work Requirements”?

Work requirements for Medicaid eligibility have been proposed as a mechanism to get non-disabled, younger, and non-pregnant people who meet the income threshold for Medicaid to participate in work or community activities, such as vocational or other job training, schooling, and community services. The argument is that work and community engagement requirements promote economic stability, enhance quality of life, and help people live without needing government aid.

However, recent history does not support these claims. In Arkansas, which implemented work requirements in 2018, Medicaid work requirements had no impact on employment levels—but one in four Arkansans who had been on Medicaid lost their coverage while the requirements were in place. (Arkansas’s work requirements were rescinded by a federal judge less than a year after implementation.) The evidence suggests that, since most non-disabled adults on Medicaid already work, people lost coverage because of the cumbersome documentation and reporting requirements, not due to increased income that disqualified them from Medicaid eligibility.

The Potential Impact of Work Requirements on Direct Care Workers

About one-quarter of all direct care workers rely on Medicaid for their health insurance due to low wages and limited access to affordable employer-sponsored insurance. Medicaid is also the largest payer of services provided by direct care workers, covering more than 42 percent of all spending on long-term care services. Medicaid work requirement proposals are therefore likely to hit the direct care workforce from both sides—both in their own health insurance coverage and in how they are paid, since long-term care consumers who are eligible for Medicaid may also be vulnerable to the unintended consequences of these requirements.

Many of the job quality challenges in direct care make it particularly difficult for direct care workers to consistently meet (or prove that they are meeting) work requirements. Direct care jobs often entail unstable scheduling, and 32 percent of direct care workers work part time—two job features that are incompatible with work requirements. Many direct care workers, especially home care workers—who make up the largest segment of the direct care workforce—may prefer to work more but are unable to secure full-time schedules. Further, direct care workers are more likely to be unpaid family caregivers than other workers, with 25 percent of direct care workers providing unpaid care to an older adult versus 19 percent of the total U.S. labor force. While providing unpaid family caregiving may exempt some from Medicaid work requirements, documenting and obtaining such an exemption is often complex and onerous.

The evidence indicates that work requirements also disproportionately negatively affect communities of color. Given that the majority of direct care workers are low-income women of color, direct care workers would be particularly impacted as an occupational group by Medicaid work requirements. Threats to economic security and health equity among communities of color could be compounded by this policy approach.

The High Costs of Work Requirements

Projections indicate Medicaid work requirements are costly to implement. However, the high costs extend beyond implementation. Direct care workers experience high rates of workplace injuries and have poorer health outcomes than workers in similar industries. Medicaid work requirements could exacerbate these health disparities by requiring some direct care workers to work more hours than they are safely able to, causing stress about documenting compliance in the context of unpredictable and unstable scheduling, and leaving others without health insurance at all. By threatening the health status of individual direct care workers, Medicaid work requirements could also intensify the direct care workforce shortage, further reducing access to much-needed care. In turn, long-term care consumers may become more at risk of emergency department visits, hospital admissions, and other costly health complications and outcomes.

Across the board, Medicaid work requirements are likely to increase health care costs. Even short periods of uninsurance—known as “churn”—can prevent people from accessing preventative and lower-cost levels of care, leading to delayed, higher-cost health care utilization. Administrative costs associated with disruptions in coverage will also increase.

In short, money spent on implementing work requirements could be better spent on investments in the direct care workforce and improving the quality of their jobs rather than on efforts to take direct care workers’ health insurance away.

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