Medicaid Work Requirements: Why Most Already Work, and Why It Matters
The recent passage of the 2025 reconciliation law, dubbed the “One Big, Gorgeous Bill,” has brought renewed attention to work requirements for Medicaid enrollees. While the legislation focuses on encouraging employment, a closer look reveals that most adults subject to these requirements are already working. The challenge isn’t a lack of willingness to work, but rather the nature of the jobs held by many Medicaid recipients and their limited access to employer-sponsored health coverage.
The Working Poor and the Coverage Gap
Employer-sponsored insurance remains the primary source of health coverage for working-age adults in the United States. Although, access is far from universal. Low-wage workers, those in certain industries, part-time employees, and those working at smaller firms are significantly less likely to be offered health insurance through their jobs. Many employers, both large and small, recognize that Medicaid provides crucial healthcare access to their employees.
New work requirements are unlikely to dramatically increase employment, as most Medicaid adults are already employed or face significant barriers to finding work. These requirements aren’t expected to substantially reduce reliance on Medicaid, given the limited availability and affordability of job-based coverage for low-wage earners.
Who’s Affected? A Deeper Dive into the Data
An analysis of data from the 2025 Current Population Survey Annual Social and Economic Supplement (CPS ASEC) highlights the realities faced by Medicaid recipients who are employed. The analysis focuses on adults aged 19-64 in states that have adopted Medicaid expansion, as well as Wisconsin (with partial expansion), as these individuals will be subject to the new work requirements.
Most Medicaid workers face barriers to employer-sponsored insurance. Approximately 65% of Medicaid adult workers in expansion states and Wisconsin either work for employers that don’t offer health coverage (52%) or are ineligible for the coverage offered (13%). This contrasts sharply with non-Medicaid covered workers, where only 21% face similar barriers.
Affordability is a major hurdle. Even when eligible for job-based insurance, about 26% of Medicaid adult workers decline it, compared to 17% of those not covered by Medicaid. A key reason? The cost. Medicaid often provides more affordable, and sometimes more comprehensive, coverage than what’s available through their employer.
Wrap-around coverage fills the gaps. Roughly 9% of Medicaid adult workers are covered by both Medicaid and their employer’s plan. In these cases, Medicaid often supplements the employer-provided insurance, covering premiums, cost-sharing, and benefits not included in the employer plan.
Part-Time Work and Industry Matters
Part-time workers are particularly vulnerable. About one-third (32%) of adult Medicaid workers are employed part-time. Among these individuals, only 21% are eligible for employer-sponsored insurance, compared to 42% of full-time workers. This disparity stems from the Affordable Care Act’s shared responsibility mandate, which primarily applies to employers with at least 50 full-time equivalent employees working 30 hours or more per week.
Industry plays a role. Eligibility for job-based insurance varies significantly by industry, ranging from 56% in mining to just 20% in agriculture and forestry. Workers in educational and health services (23% of Medicaid adult workers) have a relatively high eligibility rate (41%), while those in leisure and hospitality (16% of Medicaid adult workers) have a much lower rate (22%).
Why Aren’t They Eligible? Hours are the Key
Among Medicaid adult workers offered insurance by their employer, the most common reason for ineligibility is insufficient work hours. Nearly 70% of those ineligible report not working enough hours or weeks to qualify. Other reasons include not having worked for the employer long enough (13%) or being employed by contract or temporary agencies not covered by the employer’s plan (5%).
Did you know? Low-wage workers in firms with a high proportion of low-wage earners often face higher premium contributions for health insurance, making it even more difficult to afford coverage.
FAQ: Medicaid Work Requirements
- Q: Will these work requirements actually assist people find jobs?
- A: The data suggests not significantly, as most are already working.
- Q: What happens if someone can’t verify their work status?
- A: They are likely to lose Medicaid coverage.
- Q: Why are part-time workers less likely to be offered insurance?
- A: The Affordable Care Act’s employer mandate focuses on full-time employees.
Pro Tip: If you’re a Medicaid recipient facing new work requirements, document your employment carefully and understand your state’s specific reporting procedures.
The implementation of these new work requirements will likely lead to reduced Medicaid enrollment, even among those who are employed, due to difficulties in verifying work status. The data clearly demonstrates that the issue isn’t a lack of willingness to work, but rather systemic barriers to accessing affordable health coverage through employment.
Explore further: KFF’s Medicaid resource center provides in-depth information on Medicaid policies and trends.
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