A new study reveals a significant association between Medicaid coverage, improved health outcomes, and increased employment, particularly for low-income individuals with substantial health issues. Researchers found that as the health of Medicaid recipients improved, their likelihood of finding and maintaining a job grew considerably, a finding that stands in contrast to the premise of forthcoming federal work requirements for the program.
These findings arrive as 40 states that expanded Medicaid under the Affordable Care Act are preparing to implement work requirements by January 2027. The new rules will mandate that beneficiaries prove they are employed or have a valid reason for not working to maintain their health coverage. The University of Michigan study, however, suggests that stable health care access through Medicaid may itself be a crucial tool for enabling individuals to enter and remain in the workforce, especially those who face the most significant barriers to employment.
New Work Mandates Looming
Recent federal legislation has set a 2027 deadline for states that participated in Medicaid expansion to enforce work requirements. Under these new regulations, adults enrolled in Medicaid will need to document a certain number of work hours or prove they qualify for an exemption to keep their health insurance. Individuals who fail to meet these deadlines or submit the correct documentation risk losing their health care access. The policy is intended to encourage employment among beneficiaries. However, the results from the University of Michigan research suggest a potential flaw in this approach, indicating that the intended outcome may be undermined by the very requirements themselves. The study’s authors suggest that by providing a path to better health, Medicaid may be a prerequisite for employment rather than a disincentive.
Health Gains Tied to Job Growth
The core of the new research, published in JAMA Health Forum, is the strong link between enrollees’ health and their employment status. The study demonstrates that individuals who experienced an improvement in their health were significantly more likely to find a job. This effect was most pronounced among the population often least likely to be employed: people with low incomes who also carry a heavy burden of health problems. For this group, the gains were dramatic. Employment rates nearly doubled for enrollees who began the study with significant health challenges but reported better health over time.
Employment Statistics by Health Status
The data from the evaluation of Michigan’s Medicaid expansion provides a granular look at these trends. Among enrollees with a moderate or substantial health burden who were unemployed in 2016, 38% had found a job by 2018 if they also reported that their health had improved. In stark contrast, only 14% of their peers whose health remained the same or worsened were employed by 2018. The study found that among those with the most substantial health burdens at the start, employment jumped from 26% to 47% over the study period. Gains were also seen among those with less severe health issues. For enrollees who started with a moderate health burden and saw their health improve, employment rose from 48% to 67%. Even those with minimal health problems at the outset saw their employment rates increase from 59% to 71%.
A Decade of State-Level Data
The findings are the result of a long-term project from the University of Michigan’s Institute for Healthcare Policy and Innovation, which has been evaluating the state’s Medicaid expansion program for over a decade. The analysis utilized survey data collected between 2016 and 2018 to track changes in health and employment status among Michigan residents enrolled in the program. This longitudinal approach allowed researchers to observe the trajectories of individuals over time, providing evidence of the relationship between gaining health coverage, subsequent health improvements, and workforce participation. The consistent finding across multiple years of data strengthens the conclusion that improved health is a key factor in enabling employment.
Policy Implications and Expert Views
The study directly challenges the idea that Medicaid coverage discourages work. “These findings show that Medicaid expansion doesn’t discourage workâit helps make it possible,” stated Minal Patel, Ph.D., the study’s lead author and a professor at the University of Michigan School of Public Health. By improving people’s health, Medicaid appears to empower them to participate more fully in the workforce. The research suggests that policies requiring work as a condition of health coverage may be counterproductive, potentially taking insurance away from the very individuals who need it to become healthy enough to work. The data indicates that improved health was particularly linked to gains in full-time employment for those who were previously unemployed.
Barriers to Employment for Enrollees
The Michigan research aligns with a broader body of evidence showing that most Medicaid recipients who are able to work are already employed. National data has shown that many non-working adults on Medicaid face significant barriers to employment, including chronic illness, disabilities, caregiving responsibilities for family members, and transportation issues. Surveys of enrollees in both Michigan and Ohio have previously revealed that a majority of beneficiaries reported that their Medicaid coverage improved their ability to perform their job or to seek new employment opportunities. This context underscores the idea that for a significant portion of the Medicaid population, poor health is not a result of unemployment, but a primary cause of it. The new study provides robust, longitudinal data to support this conclusion.