The Stealthy Strategy to Strangle Medicaid

Proposed reductions in federal Medicaid expenditures are central to the ongoing Republican effort to pass a “big, beautiful” tax cut for the rich through Congress. Yet Medicaid now provides benefits to a substantial portion of low-income voters in so-called red states, leading President Donald Trump to declare immunity against explicit cuts to the program. 

Instead, Republicans are deploying the time-honored strategy of proposing strict “work requirements” for adult men in particular to reduce public commitments. The Wall Street Journal waxed eloquent on the subject of able-bodied men shirking at the expense of pregnant mothers. As Republican strategist Karl Rove puts it, “Make clear that Republicans want to end fraud while Democrats are content to perpetuate it.” Of course there’s no mention of the huge levels of fraud by large firms marketing Medicare Advantage plans to seniors. 

Work requirements poll well because, in the abstract, many voters believe that people able to pay their own way should do so. However, it turns out that these requirements can be defined in a variety of ways: Did you engage in paid work or documented volunteering last month? How about this week? Exactly how many hours? Do you have evidence? Prove it or lose it!  

In 2022, only about 6% of working-age adults covered by Medicaid were not working “long-term,” amounting to only about 3% of all Medicaid recipients       

Research on what happened when states like Arkansas temporarily implemented work requirements for Medicaid shows that they largely boiled down to documentation requirements that many eligible recipients couldn’t meet. Why else would Medicaid spending go down? If all that  purported slackers need to get a job is an incentive to do so, the requirements should increase employment without reducing Medicaid expenditures. 

Political resistance to providing adequate health insurance to low-income Americans has a long history. Medicaid reimbursements to physicians and hospitals are not only lower than those for the same services provided to the older population that qualifies almost universally for Medicare; they are also significantly lower than the actual cost of the services provided. This makes it difficult for those who are eligible for Medicaid to successfully find providers—and the difficulty is especially great in states with a relatively large non-white population. 

None of the budget estimates of “cost savings” from the proposed work requirements take into account the extent to which hospital emergency rooms will be forced to provide compensatory care, or the larger impact on the health care system. Hospitals in rural areas rely heavily on Medicaid revenues and are particularly likely to close down or reduce services.

One of my favorite images of Medicaid’s cruelly dysfunctional complexity is a stethoscope knotted into a terrible tangle. An even more accurate image would depict rubber tubes strangling the many people desperately reaching for the health care they need.