Medicaid Work Requirements Will Hamper Economic Growth

Forbes

a day ago

History and Data Show Work Requirements Don't Work
WASHINGTON, DC - APRIL 10: U.S. House Minority Leader Hakeem Jeffries (D-NY) speaks to the press ... More during his weekly press conference at the U.S. Capitol on April 10, 2025 in Washington, DC. Jeffries spoke about how the Republican budget cuts would affect Medicaid and food assistance. (Photo by)
As Congress debates proposals to add work requirements to Medicaid and increase them on SNAP (formerly known as food stamps) in the budget bill that passed the House in May and is now in the hands of the Senate, it is crucial to set aside partisan talking points and focus on what the data and economic modeling show. While the intention behind these proposals — to encourage employment and fiscal responsibility — may sound reasonable, the reality is that work requirements for Medicaid and SNAP are not only ineffective at increasing employment, but also pose serious risks to state economies and budgets.
Recent analyses from the Commonwealth Fund and George Washington University's Milken Institute School of Public Health paint a sobering picture. If work requirements are imposed nationwide, between 4.6 million and 5.2 million adults could lose Medicaid coverage in 2026 alone. This loss is not primarily due to an unwillingness to work, but rather to administrative hurdles — complex paperwork and reporting requirements that often trip up even those who are working or should be exempt.
The consequences extend far beyond individual coverage losses. States stand to lose between $33 billion and $46 billion in federal Medicaid funding in the first year, and up to half a trillion dollars over a decade. This funding loss would ripple through local economies, resulting in an estimated reduction of $43 billion to $59 billion in economic activity in 2026 and the loss of 322,000 to 449,000 jobs. State and local tax revenues would also decline by up to $4.4 billion.
The nonpartisan Congressional Budget Office has concluded that Medicaid work requirements would have a 'negligible effect on employment status or hours worked by people who would be subject to the work requirements.' Why? Because most adults on Medicaid are already working, caring for family, attending school, or are unable to work due to health reasons. In fact, the majority of adults with Medicaid are already working, and most of the rest had valid reasons for not being in the workforce, such as a disability or being in school. Recent history offers us useful lessons — in 2018, Arkansas became the first state to implement work requirements on Medicaid recipients. Multiple studies have found this had no effect on employment and only resulted in a loss of health coverage for 18,000 people. The negative impact led to the work requirement being stopped in 2019. Our national leaders should be learning from Arkansas' mistake: we need effective government policies, not solutions in search of a problem.
Work requirements also fail to address the real barriers to employment — such as lack of stable schedules and benefits, transportation, or affordable childcare. Instead, they create new bureaucratic obstacles that disproportionately affect those already struggling, without actually moving more people into the workforce. In addition to Medicaid work requirements, the bill also proposes increasing work requirements on SNAP so that older beneficiaries and those with young children are subjected to them.
Regardless of political affiliation, fiscal responsibility and economic growth should be shared goals. But the evidence shows that additional work requirements tacked onto the social safety net would undermine both. States would face significant budget shortfalls as federal funding shrinks, leading to cuts in healthcare services, job losses and potential tax increases to offset the loss of federal investment. These are outcomes that should concern lawmakers on both sides of the aisle.
Moreover, while polls show some support for work requirements in theory, there is broad, bipartisan opposition to major cuts in Medicaid funding once the real-world implications become clear.
If the goal is to increase employment and strengthen our economy, the focus should be on removing barriers to work — not erecting new ones. Investments in job training, childcare and better wages are strategies that would actually help people find and keep jobs. Medicaid itself supports employment by providing a safety net for workers in low-wage or unstable jobs who lack employer-sponsored insurance.
As we consider changes to our nation's safety net, let's ground our decisions in evidence and shared economic interests. Work requirements for Medicaid may sound appealing, but the data show they are a costly mistake—one our economy cannot afford.