Enrollees in the Medicaid health insurance program have never had a work requirement to receive the entitlement. Montana Senate Bill 334 would add a work requirement in Medicaid for those individuals who are physically able. Some background is helpful to understand the context of the bill.
Congress passed the original Medicaid entitlement in 1965 as a health insurance safety net for the most vulnerable low-income people in the United States. These individuals include the poor, parents with children, the disabled, and those needing long-term care. Medicaid is a pure welfare plan financed by both state and federal taxpayers.
Although Medicaid began with a very limited enrollment, the program has exploded and financially is one of the largest budget items for every state in the union. The original program was set up such that the federal government would match the financing with states in a 50/50 percent arrangement. The federal government gradually increased its spending percent. For example, it currently pays 62 percent of the original Medicaid program costs in Montana.
The Affordable Care Act, aka Obamacare, became law in 2010, with most benefits beginning in 2014. After litigation all the way to the U.S. Supreme Court, the law was amended such that states could decide for themselves whether to expand Medicaid to any low-income able-bodied 18 to 64-year-old person. The incentive is that the federal government would pay 90 percent of the financing of the expanded program.
Montana is one of 40 states that chose to expand Medicaid under Obamacare and did so in 2016. The Biden administration allowed states to further expand Medicaid during the COVID pandemic and Montana added over 70,000 individuals to its expanded Medicaid program. This COVID-related increase sunsets on June 30, 2025, and Montana officials must make a decision to eliminate or continue this specific expansion.
State officials unfortunately look at the Medicaid program as “free” federal money. Unlike other state budget items, for every state dollar legislators spend on Medicaid, they get at least one matching federal dollar. Of course, state and federal taxpayers are the same individuals, families, and businesses. So as states expand Medicaid, their taxpayers are ultimately responsible for the costs.
The Medicaid program is one of the federal government’s largest non-discretionary spending programs. Inflation-adjusted spending the first year of Medicaid was $10 billion compared to $900 billion for fiscal year 2023. In other words, Medicaid spending has dramatically increased far beyond inflation alone.
There has never been a federal work requirement to receive Medicaid benefits. However, the first Trump administration encouraged states to seek federal waivers and institute their own work requirements. Thirteen states had work requirements approved, but only Arkansas actually established a plan that had the consequence of losing Medicaid for non-compliance. Either courts or the Biden administration rescinded all the approved waivers, with the exception of Georgia, which won its own court battle. Many states, including Montana, are now potentially seeking a work requirement waiver from the second Trump administration.
Although the numbers are elusive, it is safe to say that some percentage of the new Medicaid enrollees are able-bodied and could hold down a job. In addition, satisfying the work requirement includes community service and/or further education. None of the waiver requests would force disabled or enfeebled individuals to find a job or lose Medicaid.
Opponents of a work requirement argue that low-income people will decline to enroll in Medicaid because of the work mandate and will go uninsured. This begs the question – why would anyone not sign up for free health insurance? Likewise, do taxpayers have the right to ask recipients of a free entitlement to give back something to society?
A job gives a person a sense of self-accomplishment and self-worth. A work requirement for the able-bodied enrolled in Medicaid provides an escape route from the welfare entrapment. It seems only logical and fair that if an individual can physically work, they should be required to do some type of job or community service to receive the welfare program. With a favorable Trump administration, Montana officials should seriously consider the proposed work requirement in SB 334 and apply for a Medicaid waiver.