The Future of Medicaid Reform: Empowering Individuals Through Work

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Executive Summary

Medicaid spending and enrollment has skyrocketed in recent years, crowding out resources for all other state priorities. The number of people dependent on Medicaid has more than doubled since 2000, with nearly 75 million individuals currently enrolled in the program. Nowhere is this growth more evident than among able-bodied adults. Nearly 28 million able-bodied adults are now dependent on the program, up from fewer than 7 million in 2000.

This enrollment explosion is fueling a massive spending surge. Total Medicaid spending has nearly tripled since 2000 and spending on able-bodied adults has increased by a jaw-dropping 700 percent.

The implications of this Medicaid explosion are clear: fewer dollars are available for truly vulnerable individuals who depend on the Medicaid program to survive. Fewer dollars are available for important budget priorities like infrastructure, law enforcement, and education. Taxpayers are on the hook for an ever-increasing bill, with no end in sight.

The status quo is unsustainable and unacceptable. But thankfully, policymakers have commonsense options that can not only reduce dependency but improve the lives of individuals who are currently stuck in the Medicaid program.

To turn the tide and help individuals improve their lives, states should pursue commonsense work requirements for Medicaid. These requirements have been wildly successful in other major welfare programs at reducing dependency, increasing incomes, and freeing up resources for those in need.

Unlike other welfare programs, Medicaid does not currently require able-bodied adults to work, train, or volunteer as a condition of eligibility. But a new federal landscape and a presidential administration focused on moving people from welfare to work has created the opportunity for the most meaningful Medicaid reform in generations. Federal law provides that the purpose of Medicaid is “to help such families and individuals attain or retain capability for independence.” Numerous states are now moving forward with Medicaid work requirements to help move more able-bodied adults to independence. More are sure to follow, driving the nation into a new welfare reform frontier.