Last week, the House Committee on Energy and Commerce approved several changes to Medicaid as part of the reconciliation bill. One major change is the imposition of community engagement requirements for non-disabled working age adults without dependent children. This change would take effect in January 2029, although some House members have argued for moving up the start date. The community engagement requirement would require covered Medicaid recipients to spend at least 80 hours in certain months working, participating in a work training program, completing community service, or participating in an education program, in order to retain eligibility for Medicaid.

Expanded work requirements have received support from the Trump Administration as well as members of Congress who have been more reluctant to support other cost-saving measures. That could portend a higher chance that some form of these community engagement requirements will make it into the final reconciliation bill.

As Congress considers these reforms, an important question is the extent to which Medicaid recipients are already in compliance with the bill’s community engagement requirement. If most recipients are already working or participating in other eligible activities, then employment is less likely to rise as a result, and the added administrative burden might not be a cost worth bearing. But if work and participation rates are low among current recipients, then employment is more likely to rise as recipients boost their work effort in order to maintain their coverage. In addition, when loss of coverage does occur, it would more likely be a result of a failure to comply with community engagement requirements themselves as opposed to an inability to navigate the additional red tape among already working people.

In a previous post, I estimated that as of December 2022 only 44% of non-disabled working age Medicaid recipients without children worked in the same month that they were receiving Medicaid. Thus, the majority of recipients subject to a monthly work requirement would need to work additional hours or else face losing Medicaid coverage.

However, the community engagement requirement passed by the House Committee on Energy and Commerce does not necessarily require monthly work for currently enrolled Medicaid recipients, differing in two key ways. First, beyond solely work it alternatively allows recipients to participate in activities including training, community service and schooling in order to comply.

Second, recipients do not necessarily need to participate in these activities every month to retain eligibility. The bill allows each state to determine a set number of months in which Medicaid recipients must participate for at least 80 hours in community engagement activities in order to retain coverage. In every six month period, a recipient must have complied with the 80 hour monthly requirement for at least one but potentially for as many as all six months if a state so chooses. For example, if a Medicaid recipient comes up for benefit redetermination in December, then a state could require that they participated in community engagement activities for at least 80 hours in any of the previous six months (June through November). At the other extreme, a state could require that they participated at least 80 hours in every one of the previous six months. Or a middle ground could be selected, in which the recipient must have participated for say at least three (not necessarily consecutive) months.

The number of months of community engagement required would have important effects on the share of Medicaid recipients currently in compliance. Based on my calculations using the Survey of Income and Program Participation, in December 2022 there were 18.2 million non-disabled, childless Medicaid recipients age 19-64, the population subject to the bill’s community engagement requirement. The figure below reports the share of these 18.2 million recipients who would be in compliance with the community engagement requirement, assuming a benefit redetermination date of December 2022, for alternative numbers of months of community engagement required by states. The total compliance rate for each number of months of community engagement required is split up by the activities through which recipients comply. The bottom portion of the bar corresponds to recipients who comply solely through work. The top portion of the bar corresponds to recipients who comply at least in part through school or training. Community service is not captured by the survey underlying these calculations, and thus is not included in this figure.

If every state chose the most lax version of the community engagement requirement—participation in at least one month during the past six-month period—then 60% of recipients subject to the requirement would be in compliance. If every state chose the most stringent version of the community engagement requirement—participation in every month during the past six-month period—then only 44% would be in compliance.

We can therefore conclude that as of December 2022, between 44% and 60% of Medicaid recipients subject to the bill’s community engagement requirement would be in compliance, with the exact share depending on states’ decisions of how many months of participation to require. Between 7.3 million and 10.3 million Medicaid recipients would not be compliant and thus need to increase their community engagement participation in order to retain Medicaid coverage.

It is notable that most compliant Medicaid recipients meet the requirement via work only. If school, training and community service were not eligible activities, then between 40% and 53% of Medicaid recipients subject to the bill’s work requirement would be in compliance, with the exact share depending on states’ stringency.

One important caveat of the figure above is that Medicaid recipients were allowed to remain continuously enrolled in the program from the beginning of the COVID-19 pandemic through March 2023, even if they would not have normally met eligibility criteria. As a result, the previous figure may overstate the employment of Medicaid enrollees when continuous enrollment is no longer in effect, since in December 2022 some relatively higher income enrollees with higher employment rates who are typically ineligible for Medicaid may have been receiving coverage. While Survey of Income and Program Participation data corresponding to 2023 are not yet available, it is nonetheless possible to analyze data corresponding to December 2018. (The 2019 data were based on interviews conducted during the beginning of the COVID-19 pandemic and thus may suffer from nonresponse or other biases.)

The below figure shows that an even lower share of Medicaid recipients were in compliance with the House bill’s community engagement requirement as of December 2018. Between 38% (if all states require six months of community engagement) and 51% (if all states require only one month of community engagement) would have been in compliance. Just 32% to 42% would have complied solely through work. This provides evidence that an even larger share of covered Medicaid recipients will need to increase their community engagement in order to retain Medicaid eligibility when community engagement requirements are implemented, given that continuous enrollment is no longer in effect.

Although the above analyses focus on requirements for currently enrolled Medicaid recipients, the House Committee on Energy and Commerce bill would additionally require newly enrolling individuals to have satisfied the community engagement requirement in at least the previous month and potentially additional (consecutive) months before getting onto the program. Over time, this could also affect the Medicaid caseload and the employment decisions of potential enrollees.

From a methodological perspective, it is worth emphasizing the importance of evaluating work and community engagement requirements which depend on monthly participation history by using data that track monthly behavior. Most analyses that estimate the share of Medicaid recipients who work rely on the Current Population Survey Annual Social and Economic Supplement, which records work at some point during the year. Whether Medicaid recipients work at some point during the year may be an interesting question, but it does not inform how many are in compliance with a work requirement, let alone a broader community engagement requirement, that depends on monthly behavior. In contrast, I use the Survey of Income and Program Participation, which asks a detailed set of questions about government benefit receipt, work hours, and participation in school and training, for each survey respondent on a monthly basis. It has the additional benefit of suffering from less misreporting than other major surveys like the Current Population Survey.