Since the Centers for Medicare & Medicaid Services (CMS) began encouraging states to apply for Section 1115 waivers to implement work requirements in Medicaid, ten states have had such waivers approved and ten other states have pending waiver applications with CMS. Of the ten approved work requirement waivers, four, including Michigan’s, have been blocked by federal courts. Other states have suspended implementation of their work requirement policies, citing ongoing legal challenges.
Court rulings to date have rested on the original Medicaid statute’s language about whether the primary objective of Medicaid is to provide coverage for low-income individuals or, as CMS and others in favor of work requirements have argued, is to improve the health of Medicaid enrollees. For the latter purpose, the belief is that requiring Medicaid enrollees to participate in work, school, job training, job searching, or volunteering activities will improve their health and employment outcomes.
We sought to understand how much expanded Medicaid coverage itself may influence these outcomes. As part of the Section 1115 waiver evaluation of Michigan’s Medicaid expansion – known as the Healthy Michigan Plan – we longitudinally surveyed enrollees about their employment and student status at two time points in 2016 and 2017 to assess for changes after the program was implemented in April 2014. The study occurred prior to implementation of the state’s Medicaid work requirement, which was in effect from January 1, 2020 until March 4, 2020, when a federal court halted the program.
Key findings from our study included:
- Employment and Student Status for Medicaid Expansion Enrollees Increased
More than half (54%) of Medicaid expansion enrollees were employed or students in 2016, and this increased in 2017 to 60%. This gain was consistent, whether individuals were still enrolled (from 53% to 59%) or no longer enrolled (from 58% to 64%) in the program. Similar increases were found among medically vulnerable sub-groups, including those with chronic health conditions (from 49% to 56%) and those with mental health or substance use disorders (from 48% to 54%).
- The Largest Gains Were Among Racial/Ethnic Minorities
The largest gains in employment and school enrollment occurred among African-Americans (11 percentage point increase), those with incomes under 35% of the federal poverty level (9 percentage point increase), people aged 35 to 50 (8 percentage point increase), and men (7 percentage point increase). It is notable that gains in employment or school attendance were largest among racial/ethnic minorities, who have historically faced labor market discrimination.
- Gains in Employment Only Occurred Among Medicaid Expansion Enrollees, Not the General Population
Over the same time period, the change in employment or student status among all Michigan adults aged 19 to 64 was small and not significant (from 74% to 75%). Among adults in this age group whose income would make them eligible for Medicaid expansion coverage, employment or student status did not change (remaining at 43%).
Policy Implications
Medicaid is an important source of insurance coverage for low-income individuals in the United States, many of whom are employed or students. Eligibility for Medicaid has been greatly expanded since the Affordable Care Act, with between 11 and 15 million currently covered by Medicaid expansion. Implementation of work requirements has demonstrated the potential for significant coverage losses, however. Our findings suggest that expanded Medicaid coverage achieves desired health and employment outcomes without work requirements. Indeed, the ability to get access to care and medical attention for health conditions is necessary for people to maintain health and functioning, including the ability to get a job or attend school.