Mississippi’s Work Requirement For Medicaid Is Just An Excuse To Expand The Welfare State

When the Mississippi House of Representatives recently passed legislation implementing Obamacare’s expansion of Medicaid, Speaker Jason White claimed common ground with the state Senate: “They want to see a work requirement in the [Medicaid expansion] bill, and our bill has that.”

But White and his Mississippi colleagues do not know — or may not wish to understand — that a de facto work requirement to obtain coverage already exists in Mississippi and that expanding Medicaid would nullify it.

Already a De Facto Work Requirement

The answer lies in Section 1401 of Obamacare, which establishes eligibility for premium subsidies on the law’s insurance Exchanges. Because congressional Democrats originally required states to expand Medicaid to all low-income residents (a requirement the Supreme Court made optional for states in 2012), only legal aliens, who face a five-year waiting period to receive Medicaid benefits, can qualify for Exchange subsidies with below-poverty income. In all other cases, citizens need income equal to the federal poverty level to qualify for subsidies.

The left calls this scenario the “coverage gap” — people in states that have not expanded Medicaid, with incomes too small to receive Exchange subsidies. Witness the Kaiser Family Foundation’s recent primer claiming that “most childless adults with incomes below the poverty level have no options for affordable, comprehensive coverage, since [Obamacare] premium subsidies are available only for people with income levels at or above poverty.”

But those not associated with the welfare-industrial complex may see an obvious solution that Kaiser cannot see — or, more likely, does not want to. To obtain “affordable, comprehensive coverage,” childless adults with incomes below the poverty level can raise their incomes above the poverty level.

Status Quo Encourages Work 

The vast majority — 80.4 percent, according to a 2012 Urban Institute study — of individuals ineligible for subsidized coverage in Mississippi comprise adults without dependents. For this reason in particular, conservatives can and should consider the so-called “coverage gap” a de facto work requirement, one in which working a reasonable number of hours will generate enough income for individuals to qualify for Exchange subsidies.

The math, and the higher demand that has increased wages for service-industry workers since the Covid pandemic, bear this out. In 2024, the federal poverty level totals $15,060 for a single person in the continental United States. At $10 per hour, an individual would have to work 29 hours per week to reach the poverty level and qualify for Exchange subsidies. At $15 per hour, an individual working 19-20 hours per week would qualify.

By not expanding Medicaid, Mississippi has created a scenario whereby individuals can receive subsidized health coverage via the Exchanges by working 20-30 hours per week — the scenario that Speaker White and his colleagues claim to desire. And the temporary increase in Obamacare subsidies passed by Democrats in the last Congress means that individuals who meet the income/work requirement qualify for Exchange subsidies that provide a zero-dollar premium for benchmark coverage in 2024 and 2025. Moreover, by linking eligibility strictly to income thresholds, this method of subsidizing coverage does not require a new state-level bureaucracy to track Medicaid beneficiaries’ weekly or monthly work hours.

Expanding Medicaid Discourages Work 

Rather than maintaining this effective work requirement, however, White and his Mississippi House colleagues instead want to extend Medicaid to all adults. While their legislation proposes a new work requirement as part of Medicaid expansion, the Biden administration will quickly discard the state’s request. 

In fact, the House-passed bill directs Mississippi officials to surrender on the work requirement principle if Washington has not approved the state’s expansion by Sept. 30. If the bill passes, Mississippi will go from a state that requires work, in the form of an income requirement, to receive subsidized Exchange coverage to another state that expands Medicaid to the able-bodied — without a work requirement.

Big-government Republicans in the Magnolia State may want to expand Medicaid anyway, desiring to bail out local medical providers. But they shouldn’t kid anyone that they’re doing anything other than expanding the welfare state and government dependence.

The Federalist