How the Debt Ceiling Bill Could Impact Medicaid Enrollees

For adults who rely on Medicaid, a bill recently passed by the House may mean holding a job would become necessary to continue accessing benefits.

What Is Medicaid?

Medicaid is a public benefits program providing health insurance for individuals with limited resources, including seniors, who qualify based in part on their income. With its enrollment numbers having climbed steeply in recent years, Medicaid serves more than 90 million people across the country today.

The Bill’s Provision on Medicaid Eligibility

The Limit, Save, Grow Act of 2023, proposed by House Speaker Kevin McCarthy (R-CA), includes provisions that would require adults aged 19 to 55 to fulfill community engagement requirements in order to remain eligible for Medicaid. Certain groups would largely be exempt, such as people with qualifying disabilities and parents with dependent children.

The bill also seeks to institute similar requirements for people enrolled in a grocery assistance program known as SNAP and another public benefits program called Temporary Assistance for Needy Families, or TANF.

What Are the Proposed Medicaid Work Requirements?

Under the policy, individuals receiving Medicaid would continue to qualify if they worked, engaged in community service, took part in job training, or completed a combination of these for a total of 80 hours per month. Each month, they also would need to verify the hours they have spent working or report on why they are exempt from the government’s requirements.

Failing to comply with the work requirements or to submit information for the reporting requirements could be reasons a state ends a recipient’s coverage.

Arguments For and Against Work Requirements in Medicaid

Those who support the Medicaid work requirements portion of the bill assert that such requirements will be helpful in getting people to secure jobs that can help them escape poverty. Beyond growing the country’s workforce, proponents anticipate fewer people would be reliant on government assistance.

In addition, requiring Medicaid recipients to work is estimated to save the government more than $100 billion from 2023 to 2033.

However, opponents argue that such requirements are onerous, would result in loss of coverage for tens of millions, and would negatively affect many family caregivers aged 55 and younger. They also say the work requirements would not ultimately increase the number of people who are employed, as data shows that most Medicaid enrollees are already working.

Others challenging the bill voice concern that adults under 65 who are impaired but fail to fit the government definition of “disabled” would be among those expected to work under the policy. (According to Justice in Aging, one of every two Medicaid recipients between the ages of 50 and 64 has an impairment that does not meet the Social Security Administration’s strict definition of disability.)

Why Now? The Debt Ceiling Debate

The 320-page bill comes amid a tense political debate regarding the nation’s debt ceiling limit. Experts are predicting that the country will default on its debt as early as June of 2023 if lawmakers fail to raise the debt ceiling.

For many Republicans, raising the debt ceiling needs to be accompanied by restrictions on government spending. Congressional Democrats, on the other hand, are seeking to extend the ceiling with “no strings attached.”

Currently, the debt limit is $31.4 trillion. McCarthy’s proposal would raise the debt ceiling by $1.5 trillion – or through March 2024 – whichever arrives first.

Meanwhile, with the COVID-19 public health emergency ending, states are in the midst of reviewing which of their residents are no longer eligible for Medicaid. This redetermination process could put current Medicaid recipients at additional risk of losing their benefits.

The bill passed the House in late April 2023, and will next move on to the Senate.