A new report warns that the proposed Medicaid job requirements could significantly limit access to health coverage, resulting in substantial economic losses and no increased employment opportunities.
The report was released last week by the Commonwealth Foundation and George Washington University’s Milken School of Public Health. Congress considers federal budget legislation, which includes a proposal that requires adults aged 19 to 55 without a dependent to be eligible for Medicaid. This is part of a reduction in the federal deficit by creating at least $880 billion in savings over the next decade, and Medicaid is expected to take a major hit.
Researchers found that 4.6 million to 5.2 million adults will lose Medicaid coverage in 2026 due to job requirements. This is mainly due to paperwork obstacles, not a reluctance to work. The report also highlights that most Medicaid adults are already employed and should either be eligible for exemption of job requirements due to factors such as nursing responsibilities, health or poor school attendance.
The report notes that because federal funding is related to enrollment, many states will face cuts as job requirements can lead to people losing coverage for Medicaid. The expansion of Medicaid eligibility and the 40 states in Washington, D.C. will lose $32.9 billion to $45.9 billion in federal funds in 2026 and as much as $500.4 billion in funding over a decade. The remaining 10 states that have not yet expanded Medicaid will not lose federal funds, the report said.
Then, the loss of funds will lead to personnel cuts. Researchers estimate that between 322,000 and 449,000 jobs will be eliminated. This includes up to 206,000 healthcare jobs, such as hospitals, doctors’ offices, clinics and pharmacies. In addition, up to 242,000 jobs will be lost in other areas, including retail, food services and construction.
These job losses will lead to a decline in GDP, state and local income. State-level GDP could be reduced by $43 billion to $59 billion in 2026 due to reduced spending and economic activity. The government will receive $3.2 billion to $4.4 billion in tax revenue due to losses in work and business.
“Medicaid is a powerful economic engine. When you cut off damage, the damage goes far beyond the health department. Our analysis shows that Medicaid job requirements will result in thousands of job losses, while state economy loses billions of dollars. These cuts won’t promote employment—they will be very opposite—they will do the opposite.
The comments were responded to by Sara R. Collins, senior scholar and vice president of healthcare coverage and visiting.
“Job requirements don’t increase employment, but trigger losses in coverage,” Collins said in a statement. “They kick people out of Medicaid, not because they don’t have jobs, but because they can’t drive complex paperwork and reporting rules. The result is that Americans are less insured and are more stressful for families, doctors, clinics and hospitals.”
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