White House warns 21 million Americans at risk of losing Medicaid under GOP proposal

House Speaker Kevin McCarthy (R-CA) speaks at a rally marking the 100th day of Republican control of the House in Washington, DC. | Nathan Posner/Anadolu Agency via Getty Images

Democrats are preparing to fight House Republicans’ plan for Medicaid work requirements.

As many as 21 million Americans could be at risk of losing their Medicaid coverage under the House GOP’s work requirement proposal, according to a new Biden administration analysis shared exclusively with Vox.

The projections are both a warning about the potential consequences of the strict reporting requirements Republicans are contemplating and ammunition for Democrats in the upcoming negotiations over raising the federal debt limit.

The House’s work requirement proposal — dubbed a “community engagement” requirement in the bill’s text — would mandate that many Medicaid recipients work, look for work, or participate in another kind of community service for at least 20 hours per week (though some conservatives want that number to be even higher).

According to Punchbowl News, these work requirements for social programs are, along with spending cuts and permitting reform, a top priority for the House GOP in talks over raising the federal debt ceiling.

Children under the age of 18, adults over 56, people on Medicaid with mental or physical disabilities, and parents of dependent children would largely be exempted. However, that exemption is not ironclad.

For one, states would have the ability to subject more people, such as parents, to the requirement, based on the Georgetown Center for Children and Families’s read of the bill’s text. Second, people with disabilities could still be required to submit information to receive an exemption — which raises the possibility that a snag in their paperwork could lead to them losing benefits.

In their new projections, the Biden administration estimated the number of Medicaid recipients who would be required to meet the work requirement or submit information to prove they should be exempted. Those are primarily people living in 40 states that have expanded Medicaid through the Affordable Care Act. Most of the expansion population is childless non-disabled adults, but some parents and some people with disabilities could also be subject to the reporting requirements depending on the state in which they live and their specific circumstances.

Several independent experts told me that they found the administration’s figure to be “plausible.” A recent Center on Budget and Policy Priorities (CBPP) analysis had estimated that at least 10 million people on Medicaid would face a “significant” risk of losing coverage under the proposal. (The CBPP estimate cautions that it is likely an undercount and did not include parents nor several of the most recent states to expand Medicaid in coming up with its projection.)

Not everyone subjected to a work requirement would lose coverage. The Congressional Budget Office estimated last year that requiring non-disabled, non-elderly childless adults to work in order to receive Medicaid benefits would lead to more than 2 million Americans losing coverage annually for failing to meet a work requirement. That would lead to a $135 billion cut in Medicaid spending over 10 years — the stated goal of House Republicans.

The available evidence suggests many of those people would lose coverage not because they are failing to work but because of administrative problems in verifying their eligibility. A new KFF analysis found that more than half of adults on Medicaid are already working full or part time, and most of the rest are either caregivers, have a disability, or are in school.

KFF

When Arkansas briefly instituted Medicaid work requirements during the Trump administration, before being stopped by a federal court order, about 17,000 Medicaid beneficiaries lost their health coverage with no discernible impact on employment. Experts expect the same story would play out if work requirements were implemented nationally.

“The savings here would mostly come from the paperwork burden that a work requirement adds to Medicaid, with people falling through the cracks of the verification process,” Larry Levitt, executive vice president at the nonprofit think tank KFF, told me.

So why are Republicans still pursuing Medicaid work requirements? Part of it is a genuine conservative belief that income-based eligibility discourages people from working, despite the evidence that most adult Medicaid recipients are either working or should be eligible for an exemption. Conservatives in the House want an ideological win in the debt-limit deal and work requirements would give them one they have long sought.

They also have limited options to find significant spending cuts. By taking Medicare and Social Security off the table — and presuming Republicans don’t want to cut spending on the military and veterans — roughly half of the federal budget is off-limits. Medicaid is the biggest federal program they are comfortable proposing cuts for, in part because their base still (narrowly) views it as a welfare program.

Republicans also think they can sell Medicaid work requirements politically. Punchbowl News reported that internal House GOP polling showed that work requirements were popular among voters in the competitive districts that will determine future House control.

But public polling suggests it’s a little more complicated than that. As I wrote in 2018, Americans are of two minds about work requirements. When asked if they support requiring work in order to receive certain government benefits, the public will generally say yes. But when those policies are framed differently, and particularly when they are portrayed as cuts, their popularity drops.

Most Americans say they approve of the Medicaid program, which has played a critical safety net role in the Great Recession and the Covid-19 pandemic, and has also expanded its rolls significantly since the ACA’s passage. Most also say they oppose spending cuts to the program.

The Biden administration’s new projections will help Democrats make their case if House Republicans continue to insist on Medicaid work requirements as part of any future debt-limit deal — and it is a signal that they are prepared to fight hard over one of the GOP’s top priorities.