Should people on Medicaid be required to work?

Senate Republicans' plan to repeal and replace Obamacare has put Medicaid in the spotlight, thanks to proposals including a move to let states impose work requirements on low-income recipients. 

Medicaid "went way above the poverty line to many able-bodied Americans," White House counselor Kellyanne Conway told ABC News program "This Week" on Sunday. "If they are able-bodied and they want to work, then they'll have employer-sponsored benefits like you and I do."

Yet most Medicaid recipients who can work already are working even without such a requirement, according to data from the Henry J. Kaiser Family Foundation, which notes that almost 8 of 10 adults in the federal health care program are in working families. Working-age adults who are on Medicaid, but not working or looking for work, tend to be disabled, caring for a family member, attending school or suffering from a temporary health problem. 

The problem, in some conservatives' view, is that expanding Medicaid under Obamacare raised the income ceiling for coverage to include the working poor, which expanded the rolls and added to the program's costs for taxpayers. 

Yet Conway's comment that Medicaid recipients should seek new jobs with health care coverage seemingly ignores that many Americans on Medicaid are working for employers who can't or won't pay for health care coverage. 

Walmart (WMT), for instance, by one estimate is said to cost taxpayers $6.2 billion in subsidies from programs such as Medicaid and food stamps, since many of its low-wage workers must rely on government programs to make ends meet. While Walmart is often singled out for this phenomenon, it's far from alone. Only 46 percent of private sector businesses offered health insurance to their workers in 2015, according to the Kaiser foundation. 

That means many low-wage workers are turning to Uncle Sam for health care insurance through Medicaid. But if those Americans are already earning their daily bread, then what's the harm of putting in a work requirement? The administrative burden on states to track whether their Medicaid recipients were working "would be expensive to enforce," according to The Commonwealth Fund, a nonprofit advocacy group focused on health care. 

"Work requirements could trigger enrollment denials and delays or increase coverage interruptions that in turn endanger the health of people in need of medical care," the foundation noted. 

In short, the work requirements would likely add administrative costs and red tape to a program that already is largely working the way it's intended, some experts fear. To be sure, Medicaid fraud exists. In many cases, these issues involve fraudulent billings by providers or when patients file claims for services they haven't received.

A bigger question underpins the argument over work requirements and Medicaid: Does the program amount to a health insurance plan, or is it a cash welfare program? Health care advocates argue the program is the former and that since Americans need to be healthy to work, Medicaid shouldn't be treated as a "tit-for-tat" program. 

Those who view it welfare assistance are more likely to favor a work requirement, similar to the Temporary Assistance for Needy Families, or TANF. That program provides financial support for poor families but allows states to determine eligibility, such as whether recipients need to prove they are working. 

Here are some additional facts about how Medicaid is used today.  

Are there currently Medicaid work requirements? No, but several states have or are planning to submit waiver requests to the federal government to allow them to add work requirements, including Maine and Wisconsin. Maine Equal Justice Partners public policy director Chris Hastedt said the work requirement has "it exactly backwards." He told the Portland Press Herald, "Medicaid supports work by giving people access to health care. People don't forgo full-time jobs with benefits in order to keep their Medicaid." 

How many Americans on Medicaid aren't working? Of the 74 million people who receive Medicaid, about 8 million are adults who could be subject to the work requirement yet aren't working or looking for work, according to Health Affairs Blog. Another 3 million aren't working but are searching for a job. Those 11 million people would be at risk of losing insurance under a work requirement. (Sixty-four percent of the 74 million Americans on Medicaid are either children, the elderly or disabled.)

Why aren't they working? When asked why they weren't employed or looking for paid work, one-third of those surveyed in the 2015 National Health Interview Survey said they were disabled. The survey excluded people receiving disability benefits, which means these respondents are probably people in poor health who haven't gone through the lengthy process of receiving a disability determination. Another one-third said they were caring for a family member. One-sixth said they were in school, while others had lost a job or were retired. 

What are the demographics of those at risk under a Medicaid work requirement? About half of them are in poor health, according to the NHIS survey. About two-thirds are women, and about half are racial and ethnic minorities. Six of 10 have either only a high school degree or lack a high-school diploma.