Medicaid work requirements likely to be a priority for Republicans in Congress, NC legislature

shows a red cross with the word Medicaid printed on it, in front of a pile of dollar bills. For Medicaid transformation

By Jaymie Baxley

With President Donald Trump back in power, a Republican-led push for work requirements for Medicaid is gaining momentum.

In recent days, Republican governors in South Carolina, Arkansas and Ohio have sought permission from the federal government to kick jobless beneficiaries off their states’ rolls. Russell T. Vought, nominated by Trump to lead the U.S. Office of Management and Budget, expressed support for making coverage conditional on employment during his Senate confirmation hearing — a policy championed in the Project 2025 blueprint he co-authored for the conservative Heritage Foundation think tank.

Supporters of the policy believe work requirements will significantly reduce federal spending on Medicaid, which provides health insurance to about 80 million Americans. But critics contend that tying eligibility to employment will only exacerbate health care inequities in low-income communities and place undue strain on the state agencies that administer the program.

“If you are of the belief, like I am, that Medicaid’s purpose is to get you healthy so that maybe you can work, and you already understand that a lot of people who can work already are working if they have Medicaid, then work requirements are just an additional barrier,” said Ciara Zachary, an assistant professor at the University of North Carolina’s Gillings School of Global Public Health. “It’s not something that helps people’s health, and it’s certainly not going to get more people in the workplace in jobs that help them thrive.”

Zachary said work requirements could also undermine North Carolina’s “hugely successful” expansion of Medicaid, which raised the maximum allowed income for eligibility to 135 percent of the federal poverty level, or just under $36,000 annually for a family of three.

More than 600,000 residents who previously made too much money to qualify for Medicaid have gained coverage since expansion launched in December 2023, swelling the state’s total enrollment to more than 3 million.

“I think it will be harmful, but depending on the perspective, if you’re trying to cut back on Medicaid spending, then you might say it’s actually successful,” Zachary said. “But if folks lose Medicaid, then they’re going to have to get their health care somewhere else. This could burden our urgent care or our emergency rooms and charity care organizations. We all know what that looked like before expansion in the state and the benefits that expansion has had on North Carolina.”

So as the state legislature returns to Raleigh to start its long work session, decisions made in Washington, D.C., will likely shape the debate in North Carolina about what Medicaid will look like in the future.

Where do lawmakers stand?

A list of spending proposals that was recently shared among members of the federal House Budget Committee estimated that Medicaid work requirements would save taxpayers $100 billion over the next 10 years.

But state Rep. Donny Lambeth, a Winston-Salem Republican who co-chairs the Joint Legislative Oversight Committee on Medicaid in the North Carolina legislature, is skeptical of that assessment. He noted that about 73 percent of Medicaid participants who joined the state’s rolls under expansion are currently employed.

“I think it’s way overestimated, the value of that, because so many of our people that we signed up were already working anyway,” he said.

North Carolina was the 40th state to expand Medicaid under the Affordable Care Act. Lambeth said lawmakers in some of the holdout states have been impressed with North Carolina’s decision to pass expansion with a provision to create a workforce development program for beneficiaries.

The program, which is expected to go live next year, was conceived as an optional alternative to work requirements. Enrollees who choose to participate will receive job training and access to career planning services, according to a proposal drafted by the University of North Carolina’s School of Government.

Still, Lambeth acknowledged that a full-blown work mandate is likely to garner more support from Republicans on Capitol Hill.

“Our caucus certainly expects, if there’s a work requirement, that there be some adjustment to include a work requirement,” he said. “I don’t have a big problem with it unless it takes people out [who are] already covered.”

U.S. Rep. Virginia Foxx (NC-5), whose congressional district has the largest percentage of Medicaid enrollees relative to its population in North Carolina, co-sponsored a 2023 bill in the U.S. House of Representatives that would require adult beneficiaries to work or perform community service for at least 80 hours a month to remain enrolled in the program. Her fellow Republicans David Rouzer (NC-7) and Richard Hudson (NC-9) voted in favor of the bill, which included exemptions for beneficiaries who are physically unable to work or are enrolled at least part-time in school.

The bill failed to advance.

The state’s Democratic Congressional delegation, meanwhile, is generally opposed to making coverage conditional on employment. In a recent interview with NC Health News, U.S. Rep. Deborah Ross (NC-2) said work requirements are “counterproductive and harm working people and their children.”

“We know that when Americans can afford to get preventative care regularly, they are less likely to show up at emergency rooms or delay care until their conditions are more serious and costly,” Ross said. “The bottom line is we should be making it easier — not harder — for all North Carolinians, including children, to access the care they need.”

Lessons from Georgia

More than a dozen states were issued waivers that allowed them to enact work requirements during Trump’s first term, but the effort was derailed by the COVID-19 pandemic, which extended coverage to people who needed it, with few restrictions.

Arkansas was the only state that went through with the policy. About 18,000 people there lost coverage before the measure was blocked by a federal judge in 2019. The state’s waiver was later rescinded by the Biden administration.

Georgia is currently the only state with a work requirement in place. The policy applies to people participating in the state’s Pathways to Coverage program, which launched in July 2023 as a way of extending access to Medicaid without actually expanding it.

Pathways to Coverage allows residents whose incomes exceed Georgia’s strict limit for Medicaid to enroll, but only if they are working, in college or performing at least 80 hours of community service each month.

Officials expected more than 240,000 people to participate in the program, but enrollment has fallen far short of that goal. To date, fewer than 7,000 Georgians have signed up.

Leah Chan, director of health justice at the Georgia Budget and Policy Institute, said the low level of interest has come at a high cost to taxpayers.

“With Pathways, a lot of money went toward technology and bureaucratic red tape,” she said. “Five times more was spent on making upgrades to our online eligibility and enrollment system compared to what was spent on health care benefits for Georgians.”

More than $58 million in federal and state funds were spent on the program in its first year, according to the institute. That breaks down to a cost of about $13,360 per enrollee.

Chan said the program has also created a “pretty steep paperwork burden” for beneficiaries and government employees.

“Even for someone that meets the eligibility criteria, you still have to learn about the program,” she said. “You have to navigate the application process. You have to submit the additional verification documents. There’s monthly verification of their qualifying hours and activities. It creates an extra hurdle not only for people that want to enroll, but also for our state agency staff who are having to process all these applications and process all this additional paperwork.”

For Chan, Georgia’s experience with Pathways to Coverage is more than just a cautionary tale. She views the program as Exhibit A in the case against work requirements.

“There’s research showing that it really has minimal impact on long-term employment gains because many of these folks are already working, and this just creates sort of a paperwork hurdle that they have to jump through in order to get access to health care,” she said. “Many folks are dealing with health care issues that need to be addressed in order for them to continue to meaningfully participate in the labor market. It just doesn’t make sense to put up another hurdle for people to jump through in order to maintain a healthy workforce.”

Looking ahead

N.C. Gov. Josh Stein, a Democrat, is likely to veto any attempt by the General Assembly to impose work requirements, but there is still a possibility that his veto could be overridden in the legislature.

The Senate has a Republican majority that can easily overturn a gubernatorial veto, while a one-vote margin in North Carolina’s House of Representatives could allow for overturning his veto.

Adding to the uncertainty is Trump’s promise to dismantle the Affordable Care Act, a move that would change the state’s funding calculus for Medicaid. Under the ACA, 90 percent of the cost for Medicaid expansion is paid by the federal government, while the remaining 10 percent is covered by a tax on hospitals.

In a recent interview with NC Health News, DHHS Sec. Devdutta Sangvai, the state’s top health official, said his agency is bracing for any and all possibilities.

“I think our responsibility now will be just to focus on what the federal government may or may not propose, and then try to understand what the impact would be here,” he said.