Who is Medicaid designed to serve?

In early January, the Trump administration announced a new policy allowing individual states to impose work requirements for Medicaid beneficiaries. The resulting uproar has energized politicians on both sides of the aisle, and further polarized a debate that has been split down party lines for the last several decades.

The administration is essentially saying that work is good for you, and we should allow people on Medicaid to have access to the dignity provided by work or a community engagement experience. Likewise, key policymakers in the administration, such as Seema Verma, administrator of CMS and Alex Azar, the new secretary of HHS, say that states are in a unique position to design work programs for Medicaid populations, since they are closest to the people that these programs are designed to serve. Most people with Medicaid who can work are employed. For those who are not working, but who could, the programs intend to provide incentives for job training and other activities that will lead to work.   Those who oppose these work requirements say that they will hurt the disabled, that many individuals on Medicaid are already working and risk losing their Medicaid coverage for bureaucratic reasons, and that these requirements fail to take into account the unique challenges of individuals who are addicted to opioids, for instance, and those with criminal records.

As with many things in Washington these days, there is a “back story” that informs the politics driving this most-recent fierce controversy over Medicaid. During the Obama administration, then Gov. Mike PenceMichael (Mike) Richard PenceLoeffler to continue to self-isolate after conflicting COVID-19 test results Loeffler isolating after possible COVID-19 infection Pence campaigns in Georgia as Trump casts shadow on runoffs MORE of Indiana tried to enact an approach to Medicaid incorporating work requirements. The Obama White House curtailed that plan, but now that former Gov. Mike Pence is Vice President Pence, he has the power to influence decisions on Medicaid on the federal level. Beyond that, Verma, the above-mentioned administrator of CMS, was a key aid to then-Gov. Pence in Indiana, and helped to design his proposed changes in Medicaid. Rounding out this triumvirate, Azar was president of Eli Lilly, the giant pharmaceutical company based in Indianapolis, for five years while Pence was governor. Not surprisingly, when the Indiana Medicaid plan again came up for review in February, CMS quickly approved its Indiana’s expansion of its Gateway to Work initiative. Two other states, Kentucky and Arkansas, have seen similar projects approved since then, and at least ten other states are lining up to secure permission to implement similar projects. All of this has Democrats talking about dark conspiracies hatched in Indiana to undermine the Obama administration’s health care efforts, and ultimately drive the needy off Medicaid.


This most recent debate over Medicaid is nothing new, following a format that has dominated the health care discussion almost since the inception of Medicaid during the Johnson administration. The focus of the policy debate changes, but it invariably revolves around one very specific aspect of Medicaid while the larger questions surrounding the delivery of health care to the needy are ignored. Who is Medicaid designed to serve? What resources do we have to devote to those in need? And how do we best deliver health care to those individuals?” Currently, the laser-focused debate on work requirements, and the politically charged environment surrounding it, is, in fact, obscuring the basic questions that need to be answered before we can move forward with any meaningful kind of progress on Medicaid.

First, what resources do we have at our disposal? Simply put, how much money do we have to spend on health care? For almost a generation, we have approached this problem as if we have unlimited resources. If the unthinkable happens and we run out of money, we can always print more. Part of this mindset views health care as a right and, since that is the case, does it really matter what we spend to get the job done? Starting out from this platform of belief propels us toward the problems that we are now experiencing in health care, problems that stem from an undefined starting line that moves forward or back, depending upon who is designing the race course. The basic questions of how much money we have, and how many people we need to take care of, remain largely unanswered.

An essential starting point would be to decide who Medicaid is supposed to serve: what is the cut-off in terms of income? And what is a fair approach for those who earn too much to qualify for Medicaid, but still cannot afford health insurance? How do we ensure that individuals don’t become part of a black-market workforce in their attempts to keep reported income low enough to still qualify for Medicaid? There are those – the disabled, for instance – who absolutely need help. There are those whose incomes are large enough so that they can make their own health insurance choices. The people in between these two groups deserve a national policy that provides them with health insurance while they invest in their skills and get on the road to independence. A work requirement can be a valuable part of that journey if it is implemented as part of a rational, consistent national policy. Seen in isolation, and evaluated in a highly charged political climate, work requirements will most likely go the way of other approaches that might have delivered better, more affordable health care to Americans in need.

James Scott, JD, is president and CEO of Applied Policy, a health policy and reimbursement consulting firm.