Why Georgia’s Medicaid work requirements are a crucial test case

Georgia is set to become the only state in the country to impose work requirements on Medicaid recipients, and the success or failure of its plan could be a test case for other states that are planning ahead for the next Republican White House.

The new program, set to launch this weekend, will allow able-bodied adults who have never qualified for Medicaid to join. It could offer health care coverage to tens of thousands additional residents — but only if they can prove they work or are enrolled in job training or other activities for 80 hours a month.

There is a renewed focus on Medicaid work requirements among conservatives, and while the Biden administration is not likely to approve any states’ request, a future GOP president likely would. 

Medicaid work requirements were a priority for the Trump administration, which approved 13 such programs. But after a federal judge struck down two approvals in 2019 and the Biden administration quietly revoked another 10, momentum for imposing work requirements stopped.

House Republicans revived the push this past spring, and work requirements for multiple federal programs became a sticking point in debt ceiling negotiations. They were not included in the final compromise legislation, as President Biden and Democrats said the policy was a nonstarter.

The Congressional Budget Office (CBO) estimated that Medicaid work requirements would save the government $109 billion but would not result in any more people working. 

It said about 600,000 adults would lose Medicaid coverage under the bill, though the Department of Health and Human Services said it could have been many more.

“Despite the evidence that Medicaid work requirements don’t work at their stated goal, which is to support employment, they persist and there continues to be interest in this in certain states,” said Joan Alker, executive director of the Georgetown University Center for Children and Families. 

“And I wouldn’t be surprised, if we have a change in administration, that this policy will be once again brought out.” 

Republicans have long argued that work requirements are necessary to encourage people to pull themselves out of poverty, and conservatives say Georgia’s program has a lot of potential.

“I think the benefits of this program are that, ultimately, it’s a way to receive health insurance, but Medicaid coverage is not the end goal,” said Chris Denson, policy and research director for the Georgia Public Policy Foundation, a libertarian think tank. “It’s ultimately a pathway to be commercially insured, rather than staying on Medicaid.”

Some GOP state officials are now trying different tactics to circumvent the previous legal challenges.

In Arkansas, state officials submitted a new waiver to the Biden administration earlier this month asking the federal government to allow work requirements for people on its expanded Medicaid program.

Gov. Sarah Huckabee Sanders (R), who was a White House press secretary in the Trump administration, said reviving work requirements will “address our state’s workforce challenges and empower thousands of Arkansans to escape the trap of government dependency.”    

A federal judge blocked the previous program in 2019 after about 18,000 people lost insurance in the first seven months it was implemented.

But the new approach will not remove anyone for failing to comply. Instead, it will move them from the private insurance used for Arkansas’s expansion to the traditional fee-for-service Medicaid program, which is less generous.

Biden health officials have not commented on pending waiver applications.

Georgia’s application for its Pathways to Coverage program was approved in the waning days of the Trump administration. In early 2021, the Biden White House rescinded the work requirements and a policy that certain beneficiaries pay a monthly premium.

Gov. Brian Kemp (R) sued, and a federal judge found in favor of the state, ruling it will see a net gain in coverage even if people are removed for failing to meet the work requirement. In a surprising move, the Biden administration did not appeal, allowing the program to take effect.

But the state’s estimates on how many people will benefit vary.

When Kemp’s plan was first unveiled, about 50,000 people were estimated to gain coverage. The latest estimates are about 345,000 people, but advocates were skeptical that many would be able to meet the reporting requirements.

Georgia has one of the strictest Medicaid requirements in the country, and will only cover parents earning up to about 30 percent of the federal poverty line (an annual income of no more than $8,000 for a family of three).

The state for a decade has refused to adopt full expansion under the Affordable Care Act (ACA). Critics say it is losing out on significant federal money, and the Pathways program will cost more to cover far fewer people than full expansion.

“What we know is that in Georgia, more than 400,000 Georgians would be covered if the state expanded Medicaid,” said Laura Colbert, director at Georgians for a Healthy Future.

Leah Chan, director of health justice at the left-leaning Georgia Budget and Policy Institute, said if Georgia’s expansion covers 100,000 people, it will cost state taxpayers $10 million more per year than full expansion.

On top of the ACA’s promise that the federal government will pay 90 percent of expansion costs, advocates say Georgia is also forgoing the American Rescue Plan’s temporary bonus, meant as an additional incentive to broaden coverage.

According to estimates by the KFF, that bonus would total more than $1.3 billion over two years.

The Pathways program will partially expand Medicaid coverage to people with incomes up to the federal poverty level: less than $25,000 per year for a family of three. But people will need to prove they already meet the 80-hour requirement in order to apply, and there’s no grace period — with no exemptions for full-time caregivers for young children or other relatives.

Those covered under standard Medicaid will get to keep their coverage without meeting work requirements.

Denson, of the Georgia Public Policy Foundation, said he thinks the partial expansion aspect of Georgia’s program makes it unique and sets it up for success.

“We’re very hopeful that this will show other states how to lead the way when it comes to serving this population,” Denson said.