Nearly 1 million Midwesterners could lose access to Medicaid if Congress passes a law mandating states to implement a work requirement for coverage, a new analysis found.
The work rule may be included in a series of cost-cutting measures in the upcoming budget deal. The specifics are still being hashed out.
The study was published earlier this month by the Urban Institute, a DC-based think tank, and funded through a grant from the Robert Wood Johnson Foundation. Due to the lack of detail of how a federal work rule would work, the analysis was based on a similar proposal in 2023, according to the report.
Medicaid provides health insurance coverage for children, adults with disabilities and people who work low-paying jobs that don’t provide health insurance. The number of people on the joint state-federal program increased following the passage of the Affordable Care Act, when many states expanded Medicaid to cover adults with incomes up to 138% of the federal poverty line.
While most Midwestern states have expanded Medicaid, they have taken different approaches to work requirements. A federal requirement would potentially change how each state handles health insurance.
A work requirement would affect people who obtained Medicaid due to the expansion. The report said that the majority of adults ages 19 to 55 in the expansion population and who are on Medicaid are working or have a valid exemption such as a disability or caregiving responsibility.
“This is a low-income and often low-literacy population,” Katherine Hempstead, a senior policy officer at the Robert Wood Johnson Foundation, said. They struggle to keep up with the forms and requirements necessary to remain enrolled in the program, she said.
Forgetting to respond to forms or properly documenting work could cause someone to be disenrolled. While this policy would save the federal government money, Hempstead said, the savings would primarily come through errors.
“If it could be executed with surgical precision, it would result in very little coverage loss and very little savings because most of the people are already engaged in these activities,” Hempstead said.
A work rule would require states to determine if someone is exempt or not. When similar rules were put in place in Arkansas and New Hampshire, many enrollees fell through the cracks even though they were exempt, the report said.
The number of people affected by a possible work rule would be determined by how much flexibility states have in implementing the work rule, Hempstead said.
A possible recession would also complicate the enforcement of a work rule by making it harder to show that you’re actively looking for work.
“There’s really not a lot of juice to squeeze out of that, except to the extent you’re tripping people up in bureaucratic hoops,” Hempstead said.
Advocates say red tape is ‘a huge concern’
Any alteration to Medicaid is going to affect people living with disabilities by creating additional barriers to care, advocates warn.
Disability Rights Iowa is part of a national network of advocacy organizations that work to ensure that people living with disabilities are not being abused, neglected and that their civil rights are being protected.
“I think the data is pretty clear that most individuals on the health and wellness plan are working, and I can tell you that Iowans with disabilities want to work, but the nature of having a disability is that some days or weeks or months are better than others,” Emily Ehlers, systems change and equity attorney at Disability Rights Iowa, said.
Work requirements would penalize people for their disability, Ehlers said, potentially causing a loss of benefits — which would then make it harder to work in the first place.
While an exemption would theoretically protect people living with disabilities from losing coverage, more red tape increases the chance for administrative errors and miscommunication, Ehlers said.
“That’s a huge concern for us,” Ehlers said.
Catherine Johnson, Disability Rights Iowa Executive Director, said that many people receiving benefits are in a double-bind where many would like to work more challenging and higher-paying jobs, but making too much money means they lose federal support for things like in-home care.
“It’s extremely expensive, and so a lot of Iowans with disabilities are forcing their wages to be depressed or not taking a promotion so that they can keep that care, which can cost up to $30,000 a year,” Johnson said.
40 expansion states, many strategies
Each state has implemented Medicaid expansion differently, and would have some flexibility in implementing a work requirement. Here’s where select Midwest states stand:
Missouri
Missouri voters amended the state constitution in 2020 to expand Medicaid. While then Gov. Mike Parson said the state would not implement expansion because the ballot measure didn’t have a revenue source, eligible Missourians sued. The Missouri Supreme Court ruled the measure was valid, and the state expanded Medicaid in 2021.
This year, the Missouri Senate passed a joint resolution to amend the state’s constitution to create work requirements, but it has not been passed by the House. About 350,000 Missourians are covered by Medicaid expansion. Between 20% and 22% of Missourians who are currently covered could lose access.
Illinois
Illinois expanded Medicaid in 2014, and about 1 million people are part of the expansion population. The state Department of Health and Human Services opposes work requirements, arguing that the administrative burden is a barrier to accessing health care.
“Loss of Medicaid coverage can force patients to change providers, skip medications, or face financial difficulties, and coverage loss has been tied to worse quality of care and worse health,” a 2023 Illinois DHHS memo said. Between 19% and 22% of people could lose coverage based on the analysis.
Iowa
The state of Iowa plans to ask the federal government for a waiver allowing the state to have work requirements for Medicaid. Gov. Kim Reynolds announced the plan on April 15.
“It has always been a priority of mine to make sure our government programs reflect a culture of work,” Reynolds, a Republican, said in a statement. “It is common sense and good policy. If you are an able-bodied adult who can work, you should work. We need to return Medicaid back to its core purpose — to provide coverage to the people who truly need it.”
She said about 100,000 “able-bodied” adults are not working. That’s a significant proportion of the roughly 250,000 adults on Medicaid due to the expansion.
An additional bill is moving through the Iowa legislature that would require people receiving Medicaid through the expansion to prove they’re working at least 80 hours per month.
The analysis estimates between 14% and 19% of Iowans could lose coverage due to a work requirement. There are opportunities for public comment in May.
Kansas
Kansas has not expanded Medicaid, and is not in this report. Nearly 40,000 people are in the “coverage gap,” according to KFF. Kansas Gov. Laura Kelly, a democrat, has pushed to expand Medicaid, but has faced resistance from Republican legislators. Kelly is open to the idea of work requirements if Kansas joins 40 other states that have expanded eligibility.
Nebraska
Voters in Nebraska expanded Medicaid through a 2018 ballot measure. Coverage became available in late 2020. The federal government originally approved a work requirement for Medicaid in October 2020, but Nebraska withdrew its waiver when the Biden administration said it planned on preventing states from having such waivers. The waiver was terminated in August 2021. There is currently no work requirement for Medicaid in Nebraska. About 86,000 Nebraskans have access to Medicaid due to the expansion.
Work requirements could cause between 15% and 17% of Nebraskans currently covered to lose Medicaid.
Sarah Maresh, the healthcare access program director at Nebraska Appleseed, said that work requirements would not only harm Nebraskans, but be an additional shock to rural areas.
“As a rural state, we’re particularly concerned about the sustainability of rural hospitals, and so these work requirements will have an outsized impact in those areas as well,” Maresh said.
The cost of screening people to see if they qualify with a work requirement would be an additional cost to the state, she said.
Nebraska Appleseed is a Lincoln-based advocacy organization that advocates for child welfare, access to healthcare and supports immigrants.
“This also comes at a time when many state eligibility workers are already stretched really thin due to high vacancies and high rates of turnover,” Maresh said.
The Midwest Newsroom is an investigative and enterprise journalism collaboration that includes Iowa Public Radio, KCUR, Nebraska Public Media, St. Louis Public Radio and NPR.
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METHODOLOGY
For this story, data journalist Daniel Wheaton spoke to advocates and researchers to explain the findings in the report and how it would affect people. He also gathered, analyzed and visualized statistics on healthcare to show the findings and place them in context.
REFERENCES
Status of State Medicaid Expansion Decisions KFF Health News (April 17, 2025)
How Work Requirements Would Affect Medicaid Coverage in Each Expansion State Robert Wood Johnson Foundation (April 14, 2025)
Assessing Potential Coverage Losses among Medicaid Expansion Adults under a Federal Medicaid Work Requirement Urban Institute (March 2025)
TYPE OF ARTICLE
News: Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
