As Congress works to finalize its budget reconciliation package, changes to Medicaid are at the forefront of discussions. Leadership in the U.S. House of Representatives has continued to affirm that the Medicaid policies under consideration ensure that no “deserving” Medicaid beneficiary will lose coverage for which they are legally eligible; instead, they have expressed their focus on the sustainability of the program by ridding it of fraud, waste and abuse.

Popular among House and Senate Republican leaders is the idea of imposing mandatory, nationwide work requirements – referred to in the legislation as community engagement requirements – on certain Medicaid enrollees, specifically for “able-bodied” adults. While we can all argue whether work requirements fit the definition of fraud, waste or abuse, most people on Medicaid are already working; the Kaiser Family Foundation data indicate that nearly two-thirds (64%) of Medicaid adults under the age of 65 work full or part-time. And while the concept of the value of work is not up for debate, the current policy approach to achieving this well-intentioned goal will result in significant coverage loss among the beneficiaries Republicans have sought to protect.

One group that mandatory work requirements will disproportionately harm is people with mental health (MH) conditions and substance use disorders (SUD), who make up approximately 40% of non-elderly adults on Medicaid. More than one in three non-elderly adults enrolled in Medicaid have a mental illness, including 10% with a serious mental illness.

In 2021, 4.9 million Medicaid enrollees were treated for an SUD. To put that into perspective, that’s more non-elderly adult Medicaid enrollees with an SUD diagnosis than those who have diabetes or asthma. And Medicaid beneficiaries who qualify because of a disability or through Medicaid expansion have higher rates of clinically identified SUDs than other groups.

Medicaid is the single largest payer for mental health and substance use disorder treatment in the United States. Further, research has shown that having affordable health coverage and care promotes individuals’ ability to obtain and maintain employment, which can be difficult, if not impossible, for people with mental health conditions and substance use disorders. Imposing work requirements on people with these increasingly common conditions, as well as the requisite administrative burdens placed on them to prove employment, would lead to missed therapies and treatments that are critical to achieving positive outcomes, and, in some cases, being able to return to employment.

It is estimated that work requirements could negatively impact 36 million adults if those requirements apply to all “able-bodied adults” between ages 19-64. While the House-passed bill includes several well-meaning exemptions, the ability to effectively track and prove these exemptions is riddled with risk. As a result, millions are still projected to lose coverage due to the proposed work requirements in the bill, including many who have mental health conditions and substance use disorders.

Work requirements and the ensuing paperwork challenges do not just pose coverage disruptions for enrollees but also hurdles for states, many of whom, through state plan amendments or Medicaid managed care waivers, have developed unique strategies, including behavioral health services for addressing SUD treatment for Medicaid enrollees. Proposals to impose mandatory, nationwide work requirements would restrict states’ ability to structure their Medicaid programs in a way that’s responsive to their individual communities’ needs – not to mention increase costs. In five states that received approval to implement work requirements in 2018 and 2019, the U.S. Government Accountability Office (GAO) found that administrative costs range from under $10 million to over $250 million, potentially exceeding the projected savings of the program.

To meet our shared goal of ensuring Medicaid best serves those who rely on it for coverage and care, we urge leaders in Congress to recognize the inadequacies associated with the phrase “able-bodied adult” and continue to allow states maximum flexibility to deliver unique care to individuals with mental health conditions and substance use disorders in the best possible manner for those suffering from these diseases.

About the authors:

Craig A. Kennedy, MPH, is President and CEO of Medicaid Health Plans of America

Debbie Witchey is President and CEO of the Association for Behavioral Health and Wellness