Work requirement is essential to healthcare reform
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Late Monday, House GOP leaders released several changes to the American Health Care Act, the House’s vehicle for partially repealing and replacing ObamaCare. The amendment would eliminate enhanced funding for new Medicaid expansion states and reducing funding for new enrollees in existing expansion states, starting in 2020. These are both critical steps to protect limited dollars for the truly needy and music to the ears of conservatives who have rightfully raised concerns that the AHCA would not roll back ObamaCare’s failed Medicaid expansion. 

But the amendment doesn’t stop there. It would also allow states to create TANF-style work requirements for most non-elderly able-bodied adults on Medicaid (pregnant women, parents with children under six years old, and 20 year olds in school would be exempted in states that chose to accept the work requirements). And while a food stamp-like work requirement is preferable, this is certainly a step in the right direction.

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Work requirements are an essential part of any replacement plan that comes out of D.C. Without work requirements in place, individuals have no incentive to increase their incomes or leave dependency. They actually face a massive disincentive to do just that.

 

Data from ObamaCare Medicaid expansion states illustrate this point clearly. In Illinois, 54 percent of expansion enrollees don’t work at all. In Arkansas, nearly half (44 percent) of expansion enrollees don’t work at all. And in Ohio, nearly 60 percent enrollees do not work at all.

But the experience of states that have implemented work requirements for food stamps shows that this commonsense policy can counteract these negative incentives and help lift people out of the welfare trap.

For example, when the state of Kansas instituted commonsense work requirements for food stamps, dependency plummeted, incomes soared, and Kansans who left welfare were better off than they were before. They also found that the less time an individual spends on welfare, the quicker they will go back to work and increase their incomes, underscoring the importance of helping individuals get out of welfare as quickly as possible.

One Kansan had been trapped on the program for more than 20 years. But after work requirements went back into effect, she nearly doubled her income and regained her independence. Another Kansan was not working at all and had been on food stamps for four years, but, after work requirements, he went back to work, earning $45,000 per year. These are just a few of thousands of success stories, all made possible by work requirements.

And this story isn’t unique to Kansas – Maine saw similar results when they reinstated work requirements. Enrollees went back to work and their incomes doubled, more than offsetting lost welfare benefits. Childless adult food stamp enrollment plummeted by a whopping 90 percent. 

In short, work requirements are a proven, commonsense policy that help people get back on their feet. Yet despite being a part of the food stamp and cash assistance programs for decades, work has never been a required component of Medicaid enrollment, even though more than two-thirds of all voters support adding them.

Numerous states – including Wisconsin and Maine – have already expressed interest in putting work requirements in Medicaid. But the current system would require them to navigate a long and complicated waiver process to make this a reality. Congressional Republicans are prudent to push the envelope and work towards real flexibility for states that don’t require them to ask D.C. for permission.

It is worth noting that the current proposal could be strengthened if amended to mirror food stamp work requirements instead of cash assistance (TANF) guidelines. For context, TANF guidelines allow enrollees to meet work requirements by simply searching for work. On the other hand, food stamp work requirements require 20 hours per week of actual work, work training, or volunteering in order to maintain eligibility. 

But at the end of the day, these changes to the AHCA would be significantly better than the Medicaid status quo – lifetime benefits that foster a culture of dependency.

Nic Horton is a senior research fellow for the Foundation for Government Accountability.


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