Work requirements in Medicaid have resurfaced as part of a broader legislative package of potential changes to Medicaid designed to significantly reduce federal Medicaid spending. A draft budget outline from Congressional Republicans includes requiring Medicaid enrollees to work or look for work as a condition of receiving coverage. While the details of the current proposal are not yet available, an analysis of an earlier proposal by the Congressional Budget Office shows that Medicaid enrollment would drop and that federal spending on Medicaid would be reduced substantially, but that the policy would not increase employment.

Data show the majority of Medicaid enrollees are working. The first Trump administration encouraged states to apply for Section 1115 waivers that included work and reporting requirements as a condition of Medicaid eligibility. For the first time in the history of the program, the administration approved waivers in 13 states. Arkansas was the only state to implement the policy with consequences for noncompliance, resulting in 18,000 losing coverage for failure to meet work or reporting requirements. Courts struck down many of the waiver approvals, including in Arkansas, and the Biden administration rescinded the remaining waivers, or they were withdrawn by the states. Currently, Georgia is the only state with a work requirement waiver in place (following a legal challenge to the Biden administration’s move to rescind it); however, several other states are pursuing work requirement waivers, anticipating a change in policy by the incoming Trump administration.

This brief updates an earlier analysis of work status and characteristics of Medicaid enrollees to show that in 2023, nearly two-thirds of adults ages 19-64 covered by Medicaid were working and nearly three in ten were not working because of caregiving responsibilities, illness or disability, or due to school attendance, reasons that counted as qualifying exemptions from the work requirements under previous policies. Based on the data, only a small share of Medicaid adults were not meeting work requirements or would not have qualified for an exemption qualifying exemptions: however, many more Medicaid enrollees who would remain eligible would be at risk of losing coverage because of the administrative burden and red tape related to reporting requirements.

What is the work status of Medicaid adults?

In 2023, most Medicaid adults under age 65 were working (Figure 1). Among adults under age 65 with Medicaid who do not receive benefits from the Social Security disability programs, Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI), and who are not also covered by Medicare (referred to hereafter as “Medicaid adults”), 92% were working full or part-time (64%), or not working due to caregiving responsibilities, illness or disability, or school attendance. The remaining 8% of Medicaid adults reported that they are retired, unable to find work, or were not working for another reason.

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