Dive Brief:

• Five million adults could lose Medicaid coverage next year if Congress enacts work requirements for adults enrolled in Affordable Care Act expansion states, according to the latest analysis from the Urban Institute and Robert Wood Johnson Foundation.
• Most of the coverage losses would result from low awareness or confusion about reporting requirements, rather than a lack of actual employment, according to the report. More than 9 in 10 affected adults work, are looking for a job or could meet an exemption criteria through being a caregiver, attending school or having a disability.
• If work requirements are applied to an even broader population than what researchers initially modeled, coverage losses could be even greater, impacting more than 30 million adults.

Dive Insight:

The report is the latest in a series of analyses from researchers attempting to quantify the impact of potential cuts to Medicaid. 

Since taking office, President Donald Trump has tasked Republicans with cutting the national deficit. Medicaid appears to be on the chopping block — this month, the Congressional Budget Office said Republicans wouldn’t be able to meet their savings targets without cutting funding for Medicaid.

Imposing work requirements for enrollees is one of the more moderate approaches to cutting funding — compared to axing the Medicare expansion program, which could shift $44.3 billion in costs to states, threaten the enrollment of nearly 11 million and cause hospital revenue to decline by nearly $32 billion.

Still, researchers say in their latest report — which analyzed the impact of coverage cuts on enrollees aged 19 to 55 who do not work at least 80 hours per month — that an estimated 4.6 million to 5.2 million people could lose Medicaid coverage if Congress enacts work requirements similar to those put in place in Arkansas in 2018 and New Hampshire in 2019. 

Both states attempted to implement work requirements during the first Trump administration. The requirements applied to their expansion populations only, and both used data from state databases or Medicaid applications to automatically identify enrollees who were exempt from work requirements, according to the report.

Still, Arkansas disenrolled more than 18,000 adults — nearly 1 in 4 of those subject to work requirements — for noncompliance with the policies over four months in 2018 before a court decision forced the state to pause the policy. Meanwhile New Hampshire was set to disenroll about a third of its expansion population before the state suspended the work requirements. 

However, researchers say that the problem in New Hampshire and Arkansas wasn’t that enrollees weren’t working. Confusion about state notices, low awareness about policies and, at times, limited job opportunities led to disenrollment rather than a lack of work effort, according to the report.

Researchers worry this issue could be replicated in other states if work requirements are implemented.

“Work requirements are a blunt tool that creates costly administrative red tape and separates eligible people from health coverage they rightfully qualify for,” said Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, in a statement. “Nearly all adults who gained coverage through Medicaid expansion already meet work requirements. People would not lose healthcare coverage because they are ineligible. They would lose coverage because of the bureaucratic burden the program would put on people across the country.”