Association Between State Policies Using Medicaid Exclusions to Sanction Noncompliance With Welfare Work Requirements and Medicaid Participation Among Low-Income Adults

Twenty states have pursued community engagement requirements (ie, work requirements) as a condition for Medicaid eligibility among adults considered able-bodied. Work requirements seek to improve health by incentivizing work,1 but may result in coverage losses.2 The impact of work requirements on Medicaid coverage may extend beyond qualifying beneficiaries, by increasing confusion around benefit rules or deterring individuals from applying for coverage.3 However, the spillover effects of work requirements on individuals not directly subject to them are difficult to study because these programs have only recently been implemented. To examine this possibility, we studied Temporary Assistance for Needy Families (TANF), the cash welfare program enacted under welfare reform in 1996. The TANF program requires able-bodied beneficiaries to fulfill work requirements, and states can elect to terminate Medicaid benefits as a sanction for nonpregnant adult TANF participants who do not comply with them.4 In states adopting these sanctions (Table), Medicaid eligibility for dual TANF-Medicaid enrollees was effectively conditional on meeting work requirements. This quasi-experimental cohort study examines whether TANF-Medicaid sanctions had spillover effects on Medicaid coverage among low-income adults who were not likely to participate in TANF and, therefore, were not directly subject to these sanctions. Author affiliations and article information are listed at the end of this article.


Introduction
Twenty states have pursued community engagement requirements (ie, work requirements) as a condition for Medicaid eligibility among adults considered able-bodied. Work requirements seek to improve health by incentivizing work, 1 but may result in coverage losses. 2 The impact of work requirements on Medicaid coverage may extend beyond qualifying beneficiaries, by increasing confusion around benefit rules or deterring individuals from applying for coverage. 3 However, the spillover effects of work requirements on individuals not directly subject to them are difficult to study because these programs have only recently been implemented. To examine this possibility, we studied Temporary Assistance for Needy Families (TANF), the cash welfare program enacted under welfare reform in 1996. The TANF program requires able-bodied beneficiaries to fulfill work requirements, and states can elect to terminate Medicaid benefits as a sanction for nonpregnant adult TANF participants who do not comply with them. 4 In states adopting these sanctions (Table), Medicaid eligibility for dual TANF-Medicaid enrollees was effectively conditional on meeting work requirements. This quasi-experimental cohort study examines whether TANF-Medicaid sanctions had spillover effects on Medicaid coverage among low-income adults who were not likely to participate in TANF and, therefore, were not directly subject to these sanctions.
Author affiliations and article information are listed at the end of this article.  4 We restricted our sample to adults aged 18 to 55 years living in households with incomes less than 185% of the federal poverty level in order to capture adults most likely to participate in Medicaid and other means-tested benefit programs. To focus specifically on spillover effects, we excluded single mothers, the population most likely to access TANF. 5 We estimated difference-in-differences models comparing changes in Medicaid participation   -6 to -5 -4 to -3 -2 to -1

Preadoption Postadoption
Estimates were generated from linear probability (ordinary least squares) difference-indifferences models. The exposure of interest was a binary indicator of adoption of TANF Medicaid sanctions. All models were adjusted for fixed effects for respondent age (years), sex, race/ethnicity, education (in years), and marital status; state-year measures of TANF adoption (binary indicator); implementation of TANF sanctions for family members (binary indicator), poverty rates (percentage), unemployment rates (percentage), and Medicaid eligibility thresholds (percentage federal poverty line); and state and year fixed effects (to adjust for time invariant state-level confounders and national secular trends). Each point represents the difference-in-difference coefficient for a specified 2-year event period on the x-axis, with the 2-year period before policy adoption serving as the reference group. The 95% CIs (shaded area) were adjusted for clustering at the state (policy) level (no CI was estimated for the period −2 to −1 years, given this was the reference group).

Discussion
Medicaid sanctions for noncompliance with TANF work requirements were associated with decreased Medicaid participation among low-income individuals not subject to these sanctions.
Study limitations include possible bias from unobserved confounders, attenuation bias from potential measurement error (eg, incomplete designation of sanction-adopting states), and unknown generalizability to modern programs.
Nevertheless, our findings raise the possibility that Medicaid work requirements may lead to reduced program participation even among individuals who are exempt from the obligations. Our estimate of the spillover effect-a relative decline of 10.1%-is more than one-half as large as the direct effect of Arkansas' now terminated Medicaid work requirement on insurance coverage (18% relative decline). 2 The spillover consequences of work requirements may thus be substantial.