More Stringent Work Requirements for Medicaid Would Have ‘Negligible’ Effect on Employment: CBO

More Stringent Work Requirements for Medicaid Would Have ‘Negligible’ Effect on Employment: CBO


In response to a request from Rep. Frank Pallone Jr. (D-NJ), the Congressional Budget Office evaluated the budgetary effects of work requirements for the Medicaid program included in the Limit, Save, Grow Act passed by House Republicans this week.

The Republican bill would require most Medicaid beneficiaries between the ages of 19 and 55 to work, perform community service or participate in an employment program for at least 80 hours per month. As we told you yesterday, the proposed rules would save about $109 billion over a decade while denying health insurance to about 600,000 people.  

But some Republicans say the primary purpose of the work requirements is to push more people into the workforce, for both economic and moral reasons. “Incentives matter. And the incentives today are out of whack,” House Speaker Kevin McCarthy said last week. “It’s time to get Americans back to work.”

The CBO, however, says that goal is unlikely to be achieved. “As part of CBO’s estimate of the budgetary and enrollment effects of the bill, the agency concludes that the amendment would have a negligible effect on employment status or hours worked by people who would be subject to the work requirements,” CBO chief Phillip L. Swagel wrote in a response to Pallone Wednesday.  

That conclusion squares with studies of similar rules enacted in Arkansas, where Medicaid recipients were subjected to work requirements starting in 2018. An analysis published in Health Affairs found that “work requirements did not increase employment over eighteen months of follow-up.”

Drew Altman, who leads the health care foundation KFF, said the Medicaid work requirements are ultimately more political than economic or fiscal. “Like skinny health plans, association plans, and buying insurance across state lines, Medicaid work requirements is a policy loser and a political winner,” Altman tweeted Thursday. “It won’t accomplish much, may hurt some people, and sounds good, especially to the Republican base.”