Do Work Requirements Work?

Medicaid is the federal program that helps needy Americans with their health care costs, and nearly half of the residents of Puerto Rico rely on Medicaid for their healthcare coverage.

Medicaid is paid for with payroll taxes (which Puerto Rican workers pay), premiums paid by recipients, and from the general fund. The cost of Medicaid is shared between the states and territories and the federal government.

Medicaid in Puerto Rico is less generous than in the states, and the federal government provides less funding for it.

Medicaid and Medicare in Puerto Rico

It may become even more difficult for low-income residents of Puerto Rico to get the medical care they need. Congress is considering work requirements for Medicaid.

Work requirements

The idea behind work requirements is to say that people under 65 must work in order to receive Medicaid benefits. Supporters of this idea point out that jobs are the best way out of poverty and that working for a living provides a sense of self-worth and dignity.

For Puerto Rico in particular, Congress points to the low labor force participation. These arguments may make sense on the surface.

What does history tell us?

As is so often the case, we can look to history to see how the idea of work requirements for Medicaid works out. The state of Arkansas decided to put work requirements in place in 2018. In order to keep their healthcare benefits, adults under 65 had to work 80 hours per month. More than 18,000 people lost their Medicaid benefits.

Did this create big savings for the state government and encourage the unemployed to get jobs?

No.

Why not?

• Most Medicaid recipients were already working. Those who were not working were generally exempt from work requirements because of disabilities. Many of these people lost their Medicaid coverage — and many of them, once they no longer had access to health care, were no longer able to work. They reported being unable to get medications that allowed them to work without pain, for example, or having to go to an emergency room rather than seeing a doctor, and losing their jobs because of missed work time. The work requirements actually reduced the number of people working.
• Many people did not have access to the tools for reporting. The largest number of people who lost their benefits were in this position because they could not keep up with reporting requirements. Arkansas is a rural state where some people do not have electricity, let alone internet access. Others did not have computers. The website used for reporting was closed at night, oddly enough, and some workers had access to computers only at work during their night shifts. Others did not have the computer skills required.
• Many people had unstable work situations. A construction worker might not meet the 80 hours requirement one month because of inclement weather. A worker in the hospitality industry might have hours cut when business was slow. Once out of compliance with the requirement, they had to wait till the next year to apply for reinstatement.

Would it be different in Puerto Rico?

Arkansas has an unemployment rate of 3%. Puerto Rico’s is 6%. Will it be easier for residents of Puerto Rico to find steady jobs than it was for residents of Arkansas?

Work requirements often allow people to be in training for jobs instead of employed. Will there be more training programs in Puerto Rico than there were in Arkansas?

Arkansas ranks 49th among the states in broadband access. 20% of households do not have internet at home. In Puerto Rico, 40% do not have internet access at home. Will Puerto Rico be better able to keep up with reporting than Arkansas was?

Even though Arkansas is not a wealthy state, Puerto Rico has fewer resources than Arkansas. Work requirements were a burden for needy people in Arkansas, and they will be a burden in Puerto Rico as well.

How did things turn out in Arkansas?

Courts struck down the Arkansas work requirement in 2019. The current governor is trying to put new work requirements in place.

Those who do not learn from history are doomed to repeat it.

At present, states are able to make their own rules about work requirements, unless they are stopped by the courts, as Kentucky and Michigan also were. Georgia is putting work requirements in place. Alabama, Nebraska, Montana, Mississippi, and many more states are doing the same.

As a state, Puerto Rico would still be able to set work requirements for Medicaid. The 10th amendment allows it. As a territory, Puerto Rico doesn’t get to make that decision. Congress decides for the territories.