In recent years, the expansion of Medicaid under the Affordable Care Act (ACA) has represented a significant shift in public health policy across the United States. By 2027, new federal mandates require the 40 states that opted for Medicaid expansion to integrate work requirements into their Medicaid programs. These mandates compel beneficiaries to demonstrate employment or provide valid exemptions to maintain health coverage, a stipulation intended to motivate and increase workforce participation among low-income populations. However, emerging evidence challenges this policy’s fundamental assumptions and highlights complex interplays between health and employment.
A groundbreaking study led by researchers at the University of Michigan’s Institute for Healthcare Policy and Innovation (IHPI) reveals that Medicaid itself may be a crucial catalyst enabling employment, rather than a hindrance. Contrary to the rationale behind work requirements, the research demonstrates that possessing Medicaid coverage is strongly associated with increased employment, especially among individuals facing substantial health burdens. The study integrates sophisticated measures of health status with detailed employment outcomes, providing novel insights into how improved health might translate into better workforce participation.
Medicaid enrollees with significant health challenges showed a remarkable improvement in employment rates when their health status improved. The study tracked over 4,000 enrollees of Michigan’s Healthy Michigan Plan (HMP) from 2016 to 2018, analyzing longitudinal health surveys and employment records. Findings showed that those beginning with significant health impairments who reported health improvements had their employment nearly double—from 26% to 47%. This dramatic increase contrasts with the lower employment rates among those whose health remained static or deteriorated.
The relationship between health improvements and employment gains was not isolated to those with severe health limitations. Enrollees with moderate health burdens who experienced better health also increased workforce participation significantly—rising from 48% employment at baseline to 67% by the study’s end. Even among participants with minimal initial health burdens, employment rates improved from 59% to 71%, indicating that health status and employment are intertwined across the spectrum of health conditions.
Central to understanding the policy implications of these findings is the definition and operationalization of “health burden.” The IHPI team crafted a multidimensional health burden metric incorporating both physical and mental health dimensions. This included quantifying the number of days within the previous month individuals experienced poor health or activity limitations. This nuanced approach allowed the study to capture not only chronic illness diagnoses but also functional health status, which is intimately linked to individuals’ ability to work.
Such data-driven evidence challenges the premise underlying the forthcoming work requirements. Requiring Medicaid recipients to prove employment may inadvertently penalize those whose health challenges would benefit from Medicaid coverage, which in turn supports their eventual workforce integration. The study’s lead author, Dr. Minal Patel, underscores that Medicaid expansion “doesn’t discourage work—it helps make it possible.” In essence, the health benefits provided through Medicaid can serve as an enabling mechanism for employment, especially for the most vulnerable populations.
Policy discussions often frame Medicaid as a welfare program that disincentivizes employment, but this research flips that narrative by showing causality in the opposite direction. Health coverage and resultant health improvements precede and contribute to employment gains, suggesting that restricting access through work requirements could reduce workers’ potential and deepen health inequities. This nuanced understanding is critical as states prepare to implement these mandates starting in 2027.
The study’s context is grounded in Michigan’s Healthy Michigan Plan, a state-specific Medicaid expansion program that enrolls approximately 716,000 low-income residents. Eligibility in this program is defined primarily by income, with an upper threshold at 133% of the federal poverty level, translating to around $16,500 annually for a single individual during the study period. This income level aligns with roughly $8 per hour for a full-time job, highlighting that enrollees represent individuals on the cusp of economic marginality.
Interestingly, at baseline in 2016, only 48% of enrollees reported being employed, a figure significantly lower among those with substantial health issues. The employment trajectory tracked in subsequent years shows that health improvements can catalyze meaningful labor market outcomes, potentially informing broader socioeconomic interventions aimed at reducing poverty and enhancing community wellbeing.
This analysis, conducted prior to the brief implementation and subsequent federal court suspension of Michigan’s Medicaid work requirements in 2020, offers a prescient look at likely unintended consequences if similar policies are pursued more broadly. The Congressional Budget Office projects that nearly 5 million individuals could lose Medicaid coverage between 2027 and 2034 due to work requirement policies, even when eligible. Such losses risk reversing critical health and employment gains documented in this study.
The rigor of this research stems from a robust methodological approach. Using longitudinal survey data, the study evaluates health trajectories alongside employment status changes, enabling a causal interpretation that many cross-sectional studies cannot provide. The interdisciplinary team behind this work includes experts in public health, medicine, policy evaluation, and healthcare innovation, bolstering the study’s credibility and policy relevance.
These findings compel policymakers and stakeholders to reconsider the relationship between health coverage and employment incentives within Medicaid. Rather than imposing barriers that may exacerbate health-related work limitations, strategies that enhance access and support health improvements might offer more sustainable and equitable pathways toward economic stability for low-income populations.
In conclusion, the University of Michigan’s recent research provides compelling evidence that Medicaid coverage serves as a foundational resource enabling beneficial health changes that underpin improved employment outcomes. As states navigate the complex implementation of federally mandated work requirements in Medicaid, these results advocate for policies that recognize health improvement as a vital precursor to workforce engagement—not an obstacle to it.
Subject of Research: People
Article Title: Employment and Health Burden Changes Among Medicaid Expansion Enrollees
News Publication Date: 31-Oct-2025
Web References:
https://jamanetwork.com/journals/jama-health-forum/fullarticle/10.1001/jamahealthforum.2025.4639
References:
Patel M., Goold S., et al. Employment and Health Burden Changes Among Medicaid Expansion Enrollees. JAMA Health Forum. 2025; DOI: 10.1001/jamahealthforum.2025.4639.
Keywords:
Health care policy, Health care, Health disparity, Health equity, Insurance, Health insurance, Poverty
