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Georgia's new Medicaid demonstration program that requires recipients to be working, going to school, or volunteering is expected to start up next year, but critics say it will be expensive to administer and will result in far fewer people added to the Medicaid rolls compared with a regular Medicaid expansion.

"The systems being set up for work requirements are very costly to implement for states," said Laura Harker, a senior policy analyst at the Center on Budget and Policy Priorities, a left-leaning think tank in Washington, D.C. She noted that found that the cost of administering work requirements could cost a state millions to hundreds of millions of dollars; it requires adding more staff people to keep up with who is and who is not reporting their hours, among other costs.

Wider Eligibility Criteria

Georgia's demonstration program, known as Pathways to Coverage, would widen the state's Medicaid eligibility criteria to include individuals with annual incomes up to 100% of the Federal Poverty Level, or $13,590 for a single person. Currently, adults in Georgia are only eligible for Medicaid if their incomes are less than 35% of the poverty level, or $4,757, although eligibility criteria for children are more generous.

To stay eligible for the program, beneficiaries must continue to spend at least 80 hours per month working, volunteering, or going to school, according to the state's (CMS). "If a member does not meet the hours and activities threshold, they will be suspended from Medicaid and no longer able to receive the Medicaid benefit," the application noted. "The member has 3 months to meet the hours and activities threshold for Georgia Pathways for the suspension to be lifted. If the member does not meet the requirement, after 3 months of suspension, then the member will be disenrolled from Medicaid," although they can be reinstated later if they achieve the 80 hours.

State officials estimate that the demonstration program, which will last for 5 years, will add 50,000 people to Georgia's Medicaid rolls. This is in contrast to the approximately 448,000 people that could be added if Georgia agreed to a as outlined in the Affordable Care Act (ACA), Harker said.

In addition, the Pathways program is eligible for reimbursement at the standard federal Medicaid matching rate for Georgia of 67%, whereas under an ACA expansion, the federal government would reimburse at a 90% rate. As a result, under the Pathways program, "it's much more expensive to cover a lot fewer people," she said.

Debate Over Work Requirements

Why did the state go for a work requirements demonstration program instead? "The foundation of the Georgia Pathways to Coverage program is incentivizing and promoting employment and employment-related activities," according to the application. "Research shows the various positive effects of employment on an individual. Employed individuals are both physically and mentally healthier than those who are unemployed. Work improves various measures of general health and wellbeing, such as self-esteem, self-rated health, and self-satisfaction. Employed individuals are also more financially stable."

Chris Denson, director of policy and research at the Georgia Public Policy Foundation, a right-leaning think tank in Atlanta, pointed out in an email that the 50,000 people potentially being added to the Medicaid rolls "would not be the same 50,000 recipients at any given time. Whereas traditional Medicaid discourages recipients from earning more money to avoid losing eligibility and thus their coverage, the [demonstration project] proposal is designed to create a more seamless transition from Medicaid eligibility for many workers." For instance, if the enrollee has a job with a health insurance benefit, the Pathways program would pay the premium for the employer plan if it was financially advantageous for Pathways.

In addition, "in the event their income rises above the eligibility threshold, they could keep their coverage and not have to move from one plan to another," he said.

But critics of the program say other motives are involved. "The motivation behind work requirements comes from a misguided 'poor law' mindset that sees Medicaid as something that people don't 'deserve' unless they fit one of the categorical eligibility groups like disability or pregnancy," Katherine Hempstead, PhD, senior policy advisor at the Robert Wood Johnson Foundation, said in an email. "According to this line of thinking, those who are merely poor should work for their benefits. Repeatedly courts have found that this framework is inappropriate and inconsistent with the purpose of the Medicaid program, which is to provide access to healthcare services."

"The purpose of a work requirement is not to promote work so much as it is to deter enrollment," she added. "The vast majority of those eligible for Medicaid under the expansion are already working or face significant barriers to work such as health problems or family caregiving responsibilities. Studies of Medicaid expansion in other states have shown that expansion supports work by allowing people to manage health issues that can sometimes present a barrier to work. It stands to reason that healthy people are better able to work and be productive."

Rocky History

CMS in October 2020 during the Trump administration. Since then, however, it has been the subject of several administrative and federal court actions, beginning in February 2021 when that the agency was considering withdrawing its approval of the Pathways program because the COVID-19 pandemic made it difficult for some potential beneficiaries to fulfill the work requirement. that the pandemic "provides no basis to excise the [work requirements] from the Georgia Pathways program."

In December 2021, CMS's approval of Pathways. The state of Georgia sued the Biden administration in federal court, and in August, Judge Lisa Godbey Wood of the U.S. District Court for the Southern District of Georgia , saying that the Biden administration's rescission of the program "was arbitrary and capricious on numerous, independent grounds."

The government decided not to appeal the decision, possibly because it was worried about what would happen next, Leonardo Cuello, a research professor at the Georgetown University McCourt School of Public Policy's Center for Children and Families, . "The decision not to appeal may have been based on fear that the result would get confirmed on appeal, since most of the appellate judges in the [federal] 11th Circuit are Republican-appointed," he said. That confirmation could set a stronger precedent for similar programs.

Arkansas was the first state to implement a Medicaid work requirement, but that program -- -- resulted in about 18,000 beneficiaries losing their Medicaid coverage, often because they couldn't comply with the reporting requirements. In addition, "many faced negative consequences such as medical debt," said Hempstead. "It did not improve employment."

Denson, on the other hand, noted that the Georgia program differs from the Arkansas program because it "imposed this [work] requirement on potential recipients rather than existing Medicaid beneficiaries ... Because Georgia is expanding healthcare coverage for previously uncovered applicants, there is no reduction in the legally mandated Medicaid coverage for current enrollees."

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