Forcing people on Medicaid to find jobs caused thousands to lose their health insurance without creating a single new worker.
Work requirements in Arkansas failed to increase the labor supply while significantly reducing participation in the program. Policy makers assumed that cutting off benefits would provide a necessary incentive for people to enter the workforce. The data shows that this rule created a chilling effect that scared off eligible people without helping them find employment. This dismantled the core belief that poverty is a result of a lack of motivation. Instead, the policy only succeeded in making the poor more vulnerable.
Do Medicaid Work Requirements Work?
SSRN · 6618138
In June 2018, Arkansas became the first state in U.S. history to implement work requirements for Medicaid. This study adopts a difference-indifferences framework to evaluate the effects of work requirements on Medicaid participation and labor supply using monthly national administrative enrollment and survey data. Work requirements led to substantial declines in total Medicaid participation exceeding the 18,164 directly terminated for noncompliance, suggesting a potential chilling effect that de