Understanding the Impact of Medicaid Work Requirements on Insurance Coverage

KFF's research provides valuable insights into how recent policy changes are impacting Medicaid enrollees, particularly in relation to their work and insurance circumstances. The legislative action referred to as the "One Big, Beautiful Bill" introduced new work requirements for specific Medicaid participants, emphasizing the interplay between employment and health insurance for adults within the program. Notably, while many Medicaid participants are already employed, they continue to depend on Medicaid due to the unavailability or inadequacy of employer-provided coverage. Employer-sponsored insurance remains a primary coverage source for working-age adults across the U.S. However, access is frequently restricted for low-income earners, part-time workers, and those employed in smaller or niche industries. Large corporations and smaller businesses alike recognize Medicaid's critical role in providing healthcare to their employees, offering crucial support where employer-sponsored options fall short. The influx of new work requirements may not significantly boost employment levels, as many Medicaid adults already face barriers to work or are employed in jobs that do not provide sufficient health benefits. While reliance on Medicaid is expected to remain steady, there could be a decline in enrollment due to the challenges in meeting verification requirements. An analysis using 2025 Current Population Survey data explored employer-based insurance offerings to adult Medicaid workers aged 19-64. The study aimed to identify why these individuals either lack access to or choose not to pursue available employer coverage. It excluded self-employed individuals and dual-enrollees in Medicare, focusing on states with expanded Medicaid and Wisconsin, which has partially expanded the program. The findings highlighted that a significant portion of Medicaid adult workers are not offered health insurance through their employers or are ineligible for such benefits. Specifically, 65% of these workers in expansion states and Wisconsin face this challenge, compared to only 21% of non-Medicaid workers. A key reason eligible workers decline employer insurance is cost; they often find Medicaid's coverage more affordable and comprehensive. Approximately 9% of adult Medicaid workers opt for employer plans while also using Medicaid to cover premiums and extend healthcare benefits. Companies with large numbers of lower-wage workers tend to impose higher premium contributions, influencing employees' decisions to eschew employer coverage. Part-time workers, who constitute about a third of adult Medicaid workers, have reduced eligibility for employer insurance, partly due to the Affordable Care Act's mandate for employees working over a specific number of hours. Eligibility for employer insurance also varies by industry, with sectors like mining offering higher eligibility rates compared to agriculture and hospitality. Even when health coverage is available, many Medicaid workers do not qualify due to insufficient hours or tenure, highlighting continuous challenges in expanding insurance uptake among low-wage and part-time employees.