Implementing Work Requirements on a National Scale: What We Know from State Waiver Experience

On May 18, the House Budget Committee advanced a budget reconciliation bill that includes significant changes to the Medicaid program. As anticipated, Medicaid work requirement provisions are included and preliminary estimates released by the Congressional Budget Office (CBO) show that this provision would reduce federal spending by $280 billion over ten years, nearly half of all estimated Medicaid savings in the bill.

If enacted, all states would be required to condition initial and continued Medicaid expansion eligibility on meeting work requirements and to exempt certain individuals from the requirements. KFF analysis shows that 92% of Medicaid adults are either working (64%) or have circumstances that may qualify them for an exemption. In previous analysis, CBO has found that a Medicaid work requirement would not have any meaningful impact on the number of Medicaid enrollees working.

States would have flexibility in some areas, including determining how many months to “look back” to verify compliance at application and renewal and whether to require more frequent verifications in between renewal periods. States would be encouraged to use available information (through “data matching”) to verify individuals’ compliance with the requirements. The provisions raise many operational and implementation questions, particularly considering the experience of Arkansas and Georgia with implementing work requirements through waivers:

• Enrollee Awareness / Outreach. Requiring all states to impose Medicaid work requirements would require extensive outreach and education in every state. In Arkansas, lack of awareness and confusion about work requirements (imposed in 2018) were common. Despite robust outreach efforts, many enrollees in Arkansas were not successfully contacted. The state noted in a recent waiver request that its complex 2018 work requirement policies caused “confusion and uncertainty,” resulting in people not knowing whether they were subject to the requirements.
• Exemptions. While proponents of work requirements describe them as applying to “able-bodied” adults, some people with disabilities (or serious or complex medical conditions) will be subject to the requirements, as they don’t meet criteria to receive SSI but qualify for Medicaid through the ACA expansion. Similar to the proposed federal legislation, Arkansas adopted safeguards including “medically frail” and “good cause” exemptions and “reasonable accommodations” to try to protect coverage of people with disabilities or other challenges; however, many enrollees struggled to access these safeguards and reported difficulties navigating the process to qualify for an exemption.
• Data Matching. The bill raises questions about the capacity and ability of state systems (and staff) to accurately “data match” (e.g., using payroll and other data) the work or exemption status of millions of individuals. How effective states are with data matching will likely impact how many individuals will need to submit proof of work hours or exemption status, and ultimately the number of individuals at risk of losing coverage. States with older or weaker systems or less integration may be less effective. But even with effective systems, not all work can be verified through existing data sources. More informal work (like “gig work”) may lack traditional employment records or pay stubs and may not be reflected in state data systems. Many people with low incomes may have inconsistent hours or income, which could create additional hurdles. Arkansas successfully data matched about two thirds of enrollees (exempting them from reporting work hours or exemption status). Among those who had to meet reporting requirements, about 70% did not satisfy the requirements, resulting in 18,000 people losing coverage.  Arkansas recently highlighted (in its new waiver request) that limitations with “data matching” led to some individuals with medical conditions or disabilities that prevented them from working to “fall through the cracks” when the state implemented its work policies in 2018.
• Verification at Application. Only one state (Georgia) has experience conditioning Medicaid eligibility at application on meeting work requirements. Over 18 months since Georgia launched its “Pathways” program, the state has only enrolled 7,000 individuals—far short of the state’s own estimated enrollment of 25,000 adults in the first year and 64,000 over 5 years. The state’s interim waiver evaluation revealed that work requirements had a significant impact on lowering program enrollment, particularly for adults ages 50-64.
• Administrative Costs. Implementing work requirements involves complex systems changes (e.g., developing or adapting eligibility and enrollment systems), enrollee outreach and education, and staff training. According to GAO, federal and state administrative costs to implement Medicaid work requirements are sizeable. Recent investigative reporting found Georgia’s “Pathways” program has cost the federal and state government more than $86 million (as of the end of 2024), with three-quarters spent on consulting fees. GAO recently confirmed it is examining the costs of Georgia’s Pathway program, with a report expected this fall.
• Targeted Work Supports. Research has shown that access to affordable health insurance and care promotes individuals’ ability to obtain and maintain employment, helping people manage chronic conditions and supporting people’s ability to work jobs that may be physically demanding. While most Medicaid adults are already working, some states have launched initiatives to support employment for Medicaid enrollees, without making employment a condition for eligibility. Montana created “HELP-Link,” a free voluntary workforce support program for eligible expansion adults (funded only with state dollars), which also helps participants address barriers to work including transportation and child care. A study of Montana’s Medicaid expansion, including HELP-Link, found an increase of four to six percentage points in labor force participation among low-income, non-disabled adults ages 18-64 following expansion, compared to higher-income non-Medicaid Montanans and to the same population in other states. While federal Medicaid funds cannot be used for work supports (e.g., to help individuals overcome barriers to work like child care and transportation), CBO has found that targeted work supports can help boost employment. Unlike welfare reform, the Medicaid work requirement in the reconciliation bill does not provide supports like child care, transportation, or job training.

The bill seeks to implement work requirements on a national scale, including requiring states to verify individuals’ monthly work status and implement a long list of exemptions—policies that proved challenging for Arkansas and Georgia to operationalize and led to 18,000 people losing coverage in Arkansas, without increasing employment. CBO’s hefty estimated federal savings from the proposed national Medicaid work requirements signals an expectation that the draft policies under consideration would result in significant coverage loss and prevent many people from enrolling.