ISSUE: The recent debate regarding Medicaid Section 1115 demonstration waivers that include work requirements has focused on potential loss of coverage for Medicaid beneficiaries, but there has been little discussion of the potential impact on providers that serve Medicaid patients. GOAL: To assess the potential financial impact on hospitals in states that have approved or pending Section 1115 demonstration waiver applications or bills that have been passed by state legislatures for implementing work requirements in their Medicaid programs. METHODS: This brief updates our prior analysis (published March 2019) on the financial impact that Medicaid work requirements may have on hospitals by incorporating results from a recent study of potential Medicaid coverage loss because of work requirements performed by Leighton Ku and Erin Brantley for the Commonwealth Fund, updated hospital financial data, and expanding our analysis to additional states that are considering implementing work requirements in Medicaid. KEY FINDINGS AND CONCLUSION: The results show that Medicaid work requirements could weaken hospitals' financial positions, especially rural hospitals, in states that implement these requirements as a condition of coverage. However, the design of states' Medicaid work requirement programs will play a key role in how many beneficiaries lose coverage and the resulting financial impact on hospitals.
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