As Medicaid work requirements loom, study finds links between coverage, better health & higher employment

Recent federal legislation requires the 40 states that have expanded Medicaid under the Affordable Care Act to start implementing work requirements in their Medicaid programs by January 2027. 

But a new University of Michigan study suggests that those requirements may work against their intended purpose.

The requirements mean people with low incomes will need to prove they’re working, or have a specific reason not to work, in order to keep their Medicaid health coverage. If they do not meet deadlines or submit the right information, they could lose their coverage for health care.

But the new study shows that Medicaid coverage itself is associated with employment gains among those least likely to have jobs: people with both low incomes and burdensome health problems. 

It also shows that health improvements among Medicaid enrollees are strongly associated with employment gains. 

Employment nearly doubled among Medicaid enrollees who started out with substantial health problems but saw their health improve. By the end of the study period, 47% held full- or part-time jobs, up from 26% at the start. 

Among those with moderate or substantial health burden, 38% of enrollees who were unemployed in 2016, but later reported improved health, had jobs by 2018. That’s compared with just 14% of those whose health remained unchanged or worsened in that time.

The study also shows employment gains among Medicaid enrollees with medium and low levels of total health burdens. However, most people in these groups started out employed or self-employed, either full- or part-time.

The findings, published in JAMA Health Forum, come from a team at the U-M Institute for Healthcare Policy and Innovation that has evaluated Michigan’s Medicaid expansion for over a decade. 

“These findings show that Medicaid expansion doesn't discourage work—it helps make it possible,” said Minal Patel, Ph.D., lead author of the study, member of the IHPI evaluation team and professor in the U-M School of Public Health. "By improving health, Medicaid allows people to participate more fully in the workforce."

Medicaid expansion and work-related changes

The mandate for work requirements in states that have expanded Medicaid under the Affordable Care Act was signed into law this summer as part of the One Big Beautiful Bill Act.

The Congressional Budget Office has estimated that nearly 5 million Americans may lose Medicaid coverage, even if they still qualify for it, between 2027 and 2034.

IHPI’s evaluation of Michigan’s Medicaid expansion, called the Healthy Michigan Plan, was required by the Centers for Medicaid and Medicare Services and conducted under a contract from the Michigan Department of Health and Human Services.

Patel worked with senior author and U-M Medical School professor Susan Goold, M.D., MHSA, and the rest of the IHPI evaluation team to analyze survey data and records from more than 4,000 HMP enrollees.

HMP currently covers 716,000 Michiganders with incomes up to 133% of poverty level. That was an annual income of about $16,500 for an individual during the study period, or about $8 an hour at 40 hours a week.

All the study participants had coverage under the Healthy Michigan Plan when they participated in a survey in 2016 that included questions about their health and employment. Most were surveyed again in 2017 and 2018, though some had left Medicaid by that time.

The study was done before a Michigan-specific work requirement briefly took effect in early 2020 and was ended by a federal court decision, before any individuals lost coverage.

Health status and employment status: Baseline and change

At the outset, 18% of enrollees had a substantial health burden. Health burden is a measure the IHPI team developed to integrate multiple measures of health status, including the number of days in the past month when someone said their physical or mental health wasn’t good or kept them from engaging in usual activities. 

Another 13% had a moderate health burden, and 69% had minimal health burden. 
In the full cohort of Healthy Michigan Plan enrollees, 57% had at least one chronic condition, including diabetes, heart disease, stroke, any form of arthritis, chronic obstructive pulmonary disease, asthma, high blood pressure or cancer. 

Half of the enrollees with substantial or moderate health burden who took follow-up surveys said their health had improved over time. Most of those with minimal health burden said their health stayed about the same.

At the start in 2016, 48% of the surveyed enrollees were employed or self-employed. 

But enrollees with substantial health burdens had much lower levels of employment at the start – and had the biggest jumps in employment over time, from 26% to 47%. Those who said their health got better had the biggest employment gains. 

Among enrollees who started with moderate health burden and saw improved health, 48% were employed at the start but 67% had jobs by the end.

Those with minimal health burden whose health stayed the same also saw employment rise, from 59% to 71%.

In addition to Patel and Goold, the study’s authors are Sarah Clark, M.P.H.; Erin Beathard, M.P.H.; Matthias Kirch, M.S.; Nicolas Box, M.P.A.; Renuka Tipirneni, M.D., M.Sc., and IHPI director John Z. Ayanian, M.D., M.P.P.

Data collection for the study was funded by MDHHS and CMS for the purposes of the evaluation, but the study does not represent the official views of either agency. 
 

Employment and Health Burden Changes Among Medicaid Expansion Enrollees, JAMA Health Forum. DOI:10.1001/jamahealthforum.2025.4639