Democratic leaders demand investigation into cost of Medicaid work requirements

Rep. Frank Pallone (D-N.J.)
Rep. Frank Pallone, Jr., D-N.J., is one lawmaker calling for a GAO probe into the administrative costs of Medicaid work requirements. (Ryan Kelly/Getty Images)

Democratic leaders in both chambers are demanding to know the costs associated with states' work requirement experiments, saying the changes add administrative expenses to already strained budgets. 

Sen. Ron Wyden, D-Ore., ranking member of the Senate Committee on Finance, and Rep. Frank Pallone, Jr., D-N.J., ranking member of the House Committee on Energy and Commerce are asking the Government Accountability Office to investigate how much money is being spent to verify the new eligibility requirements.

"It is our responsibility to ensure CMS's appropriate stewardship of the Medicaid program and to protect against wasteful and reckless spending of limited federal resources," the lawmakers wrote in a letter (PDF) to Comptroller General Gene Dodaro. Wyden and Pallone added that they're seeking to "understand the impact these complex and restrictive policies may have on federal spending, state budgets, and the beneficiaries who depend on the Medicaid program."

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As of March, three states—Arkansas, Indiana and Kentucky—have been approved to require certain Medicaid enrollees to work, or prove they are looking for work, in order to receive coverage.

Other states, including Alabama, have taken steps to include such requirements, adding to strict eligibility restrictions. Unlike Alabama and Kentucky, Indiana and Arkansas expanded the Medicaid program under the Affordable Care Act. 

RELATED: Researchers estimate Alabama's work requirements would drop 8,700 from Medicaid

The lawmakers said the Bluegrass State would need about $374 million over the next two years alone to implement the new requirements. They also cited studies that found the requirements would incur "substantial and counterproductive administrative costs" much of which would be shouldered by the federal government.

Administrative costs can be a major deterrent to policy changes. Arkansas did not implement health savings accounts after considering the administrative expense of the accounts. Additionally, Kentucky amended its waiver application seeking to move from a tiered-hour work requirement to a flat hourly requirement due to administrative concerns, according to the Kaiser Family Foundation.

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