Medicaid Work Requirements Would Help Move Millions of Able-Bodied Adults From Welfare to Work
Key Findings
- Enrollment of able-bodied adults on Medicaid has skyrocketed, driving up spending.
- Most able-bodied adults on Medicaid do not work at all.
- Welfare work requirements have successfully moved millions of able-bodied adults from dependency to self-sufficiency.
- Implementing Medicaid work requirements nationwide would save federal taxpayers $260 billion over the next decade.
Overview
Medicaid enrollment and costs have skyrocketed this century.1 The biggest driver of this growth is the increase of able-bodied adults in the program, burdening taxpayers and the truly needy alike.2 In total, nearly 85 percent of the enrollment increase over the last 10 years is directly attributable to able-bodied adults.3-6 Enrollment of able-bodied adults has crowded out resources for the truly needy, including seniors, children, and individuals with disabilities.7
Unfortunately, without work requirements in place, most able-bodied adults on Medicaid do not work at all.8-9 This is despite most new jobs requiring little experience, education, or on-the-job training.10
To encourage able-bodied adults to transition from welfare to the workforce, Congress should implement work requirements for the Medicaid program. Even modest work requirements would save taxpayers’ money and boost the economy. Work requirements have been successful at the state level, boosting incomes and helping able-bodied adults return to work in more than 1,000 different industries.11-16
Work requirements would help move millions of able-bodied adults from welfare to work. This, in turn, would save taxpayers billions of dollars, preserve resources for the truly needy, and put the Medicare and Social Security trust funds on more solid ground.
Able-bodied adults are swelling the Medicaid program
The Medicaid program was designed to provide a safety net for the truly needy—low-income children, seniors, and individuals with disabilities.17 But the program now enrolls millions of able-bodied adults who can and should be working.
Medicaid costs have exploded, reaching nearly $919 billion per year, up from $206 billion in 2000.18-20 Federal taxpayers have borne the brunt of this growth, with federal Medicaid spending increasing more than fivefold over this period.21 Without reform, the burden on federal taxpayers will only continue to climb, with the program’s expected costs to top $8.6 trillion over the next decade.22
The primary driver of the growth in spending has been enrollment. More than two-thirds of the increased federal Medicaid costs since 2000 have been caused by enrollment increases.23-25
The biggest reason for the increase in enrollment is not a growing number of truly needy individuals, but an increase in the number of able-bodied adults on Medicaid. This population has increased from roughly seven million in 2000 to a staggering 34 million in 2024.26-28
Shockingly, federal taxpayers now spend more on Medicaid for able-bodied adults than they do for seniors, individuals with disabilities, or low-income children.29
Much of this growth in enrollment and spending was driven by ObamaCare, which expanded the program to a new class of able-bodied, mostly childless adults. The number of able-bodied adults on Medicaid has more than doubled after ObamaCare expansion.30-32
These able-bodied adults are forcing the truly needy to the back of the line. More than 700,000 individuals with developmental or intellectual disabilities or other conditions that require special care are languishing on Medicaid waiting lists.33 In the early years of ObamaCare, roughly 22,000 vulnerable Americans in Medicaid expansion states died waiting for needed services while able-bodied adults were covered.34
Most able-bodied adults on Medicaid are not working at all
Without work requirements in place, most able-bodied adults flooding Medicaid at the expense of the truly needy and taxpayers are not working.
Radical leftist groups insist that most able-bodied adults on Medicaid are already working.35-36 Some even claim that these able-bodied adults are working full time, just for employers who do not offer health coverage.37 But data obtained from state Medicaid agencies shows that this is a lie.
These claims are based on an extrapolation of survey responses.38 In some states, the sample size for these estimates was based on as few as 41 people.39 The underlying data is based on respondents’ self-reported information, including self-reported information on whether they were on Medicaid and whether they were working.40 There is an entire body of research showing the challenges and errors in survey-based measurements of income and welfare program participation.41-43
These claims are also mathematically impossible. A single able-bodied adult working even 19 hours at the average entry-level wage would work themselves above the poverty line.44 Even part-time work would move most of these able-bodied adults out of Medicaid eligibility entirely, let alone full-time work.
New data obtained from state Medicaid agencies put this lie to rest. Across 23 states with responsive records, a whopping 62 percent of able-bodied adults on Medicaid had no earned income, meaning they were not working at all.45-46 This dataset covers individual earnings for nearly 21 million able-bodied adults on Medicaid.47
This data is consistent with administrative data from other welfare programs. In food stamps, for example, 66 percent of able-bodied adults on the program do not work at all.48
This data point has also remained consistent over time, with similar rates of able-bodied adults not working both before and after the COVID-19 pandemic.49
These able-bodied adults are skipping out on work at a time when work is plentiful, pays well, and requires little experience, education, or training.
Work is plentiful
As the economy expands, even more jobs will become available. The vast majority of these jobs are expected to require no experience, a high school degree or less, and one month or less of on-the-job training.50
These jobs also pay well. Employers are desperate for workers, pushing wages higher.51-52 Despite the higher wages offered, there are millions of unfilled jobs across the country.53 An entry-level job pays more than $15 an hour on average across the country.54 At this level, an able-bodied adult would only have to work roughly 19 hours a week to move above the poverty line.55
Work requirements are a proven tool to help transition able-bodied adults from welfare to the workforce, benefiting themselves and small businesses desperate for their services.
Work requirements work
When work requirements were implemented in the 1990s, millions of able-bodied adults moved from welfare to work, rapidly growing the economy.56
At the state level, food stamp work requirements have resulted in able-bodied adults leaving welfare in record numbers to join the workforce.57-62 These individuals returned to work in more than 1,000 industries.63 After entering the workforce, their incomes doubled within a year and tripled within two years.64-66 Even better, these higher wages more than offset any lost welfare benefits.67
States have seen similar successes in moving able-bodied adults from Medicaid into the workforce. When Tennessee moved 170,000 able-bodied adults off their Medicaid program in 2005, they saw an immediate increase in labor force participation, job searches, employment, and private health insurance coverage.68
When Arkansas implemented work requirements for a small number of able-bodied adults in 2018, more than 9,000 went to work, and more than 14,000 left the program due to higher incomes in just the few short months the requirement was in effect.69
These are impressive numbers, but even more important are the stories of the individuals that work requirements helped. Olivia went into her local workforce office when she received notice that she was subject to the work requirement. She got an interview that same day and started work six days later.70 Chris went into his workforce office unemployed, but wanting to comply with the work requirement, he left the same day with a job.71 Jeremy started volunteering to meet the work requirement, which ultimately led to a full-time job with benefits.72 There are thousands of stories just like these.
The evidence is clear: Work requirements help people transition from welfare to work.
Medicaid work requirements would save billions of dollars, preserve resources for the truly needy, and boost the economy
Even a modest work requirement would go a long way to help able-bodied adults get back into the workforce while improving the budgetary outlook of the federal government.
For example, Congress could apply the work requirement to able-bodied adults under 59, requiring them to work, train, or volunteer at least part time to continue to receive Medicaid. Pregnant women, individuals who are mentally or physically unfit for employment, individuals participating in a drug or alcohol treatment program, and individuals enrolled in an education program at least part time could all be exempted. Parents or caretakers of young children could also be exempt, while the work requirement could apply to parents with school-aged and teenage children.
In 2023, the House of Representatives passed the Limit, Save, Grow Act, which had similar Medicaid work requirements.73-74 Under that proposal, able-bodied adults would generally have to perform some combination of work, job training, or community service for 80 hours per month.75 However, the hourly requirement was also limited to 80 times the federal minimum wage.76 This means individuals working minimum-wage jobs could comply with as few as eight hours per week in some states, with no state requiring more than 19 hours.77 Individuals with wages higher than the minimum wage law in their state could also meet the requirement with fewer hours.
An individual working at the average entry-level wage would meet the work requirement with less than nine hours per week, with ranges from less than six hours to at most 13 hours, depending on the state.78 For comparison, most people receiving cash welfare must be in work-related activities for 20 to 30 hours a week.79
Even these relatively modest work requirements would save billions of dollars and boost the economy.
An estimated 34 million able-bodied adults were enrolled in Medicaid in 2024 without any work requirements in place.80 In 2022, the Congressional Budget Office estimated $135 billion in savings over nine years for a similar work requirement for able-bodied childless adults under 50 years old.81 Applying work requirements to a broader group of able-bodied adults under 60 without young children would increase those savings to $260 billion over the 2025-2034 budget window.82-89
Helping able-bodied adults transition to the workforce would also provide a boost to the economy. Welfare reform in the 1990s boosted gross domestic product by moving millions of able-bodied adults back into the workforce, and this reform would do the same thing.90 Moving able-bodied adults from welfare to work would also improve Social Security and Medicare finances, as those trust funds would see greater payroll tax receipts from new workers.91
The Bottom Line: Congress should help move millions of able-bodied adults from welfare to work by implementing Medicaid work requirements.
The Medicaid program is being overrun by able-bodied adults, costing taxpayers billions and waitlisting the truly needy. Nearly two-thirds of these able-bodied adults are not working at all.
The answer to these problems is for Congress to implement work requirements that will ensure that able-bodied adults are working, training, or volunteering. Doing so would save billions of dollars for taxpayers, boost the economy, and give a much-needed jolt to the Social Security and Medicare trust funds.
Work requirements have a proven track record of transitioning individuals from welfare to work, increasing their incomes, and leaving them more financially secure.
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