Medicaid expansion in the Affordable Care Act (ACA) required coverage of individuals with incomes from 0% of the federal poverty level (FPL) through 133% of the FPL. The requirement to cover this group was overturned in NFIB v. Sebelius. As a result, it is now up to states to determine whether they will offer Medicaid coverage to these individuals. This new category of eligible Medicaid beneficiaries is often referred to as childless adults.
A number of Republicans, both governors and those in Congress, have taken to using the term “able-bodied” to refer to this group. If you are able-boded, the theory goes, the Medicaid program should reasonably expect you to work. As a result, some Medicaid expansion and Medicaid reform proposals have included work requirements as an eligibility criteria for Medicaid. We can expect this topic to continue to be raised as we get deeper into ACA reform.
As policymakers debate whether to include work requirements in their Medicaid proposals, it is important to understand who will be affected by the requirement. Currently, if you have an income that is 75% of the federal poverty line (FPL), just over $9000 per year, that equates to roughly 30 hours of work per week for three-quarters of the year at the federal minimum wage. This suggests that anyone making between 75%-133% of FPL is engaged in the workforce in some capacity. It is hard to fathom that a person making at least 75% of the FPL will not check the box for a work requirement in the Medicaid program.
So who exactly is the able bodied person not already meeting a work requirement? More importantly, who thinks they know. Research has suggested that 40% of people living below 50% FPL are engaged in the workforce, while 52% of those between 50% and 138% FPL are working. However, these data are not broken out by Medicaid eligibility group. Additionally, there are significant limitations in the Medicaid Statistical Information System (MSIS) data, which is a data system that collects eligibility, enrollment, program, utilization and expenditure data in Medicaid. MSIS captures an individual’s eligibility group and includes some income level data. However, the breakouts of income level are large groupings: 0-100% FPL, 101-200% FPL, 201-250% FPL, 251-300% FPL, and 300% FPL and above. Furthermore, MSIS requires the state to actually report these data into MSIS, so not all income data may be reported. With these data limitations it is difficult to determine who in the new adult group is already participating in the work force.
Policymakers need to be cognizant of who can be affected by their policies and if their policies will actually be effective. Who is the able-bodied person who is not working right now? What are their health care spending patterns? Can those persons actually work? If most people in the new adult group already participate in the workforce in some capacity, is it worth the administrative and financial burden of establishing a work requirement in the program? Additionally, with the limitations of current data systems, how will policymakers ensure that states are implementing a work requirement? It’s not clear anyone has the answer to these questions. These questions and their answers should be part of any deliberation when examining work requirements in Medicaid.