Originally published in Inside Sources.

​House Speaker Mike Johnson is defending Medicaid work requirements in the “Big, Beautiful Bill,” arguing on “Meet the Press” that the requirements don’t kick people off benefits but are merely a popular and reasonable tool to encourage work.

His comments are the latest in a familiar debate, as supporters cite work requirements as a path out of poverty, while critics decry the measures as punitive barriers to care. Both sides are missing crucial elements that could deliver the most meaningful safety net reform in a generation. The Senate should seize the opportunity.

Opponents frame work requirements as burdensome obstacles to medical coverage, with one commentator asking, “On what moral basis ought we deny healthcare coverage to people who aren’t working?”

The real question isn’t whether to link work with Medicaid; it’s how to help more Americans use safety net programs as a bridge to financial independence.

Medicaid’s statutory purpose is to “furnish … medical assistance” and to help recipients “attain or retain capability for independence.”

Sustained engagement with work is essential to helping Medicaid recipients achieve independence and maintaining a well-functioning safety net, as it empowers people to escape poverty and improve their health. U.S. Census Bureau data show that “in 2023, full-time, year-round workers had the lowest poverty rate (1.8 percent), while those who did not work had the highest (29.7 percent).” From 2019 to 2023, part-time workers had a 15 percent poverty rate.

Employment also improves mental health and provides dignity and a sense of meaning.

Critics of work requirements embrace Medicaid’s health mission but ignore goals tied to self-reliance.

The Biden administration interpreted  “independence” in Medicaid’s statute to mean physical functioning, not financial self-sufficiency. Both Trump administrations disagreed.

The Senate should resolve this dispute by clarifying in law that promoting financial independence through work is a core objective of Medicaid.

Even national proponents who want Medicaid to be more of a “launchpad” than a “safety net” overlook two critical blind spots. Work requirements are insufficient to achieve a true pro-work, upwardly mobile vision of reform for two reasons.

First, the pernicious work disincentive known as “benefits cliffs” still creates a very real barrier. These cliffs can occur when a small raise triggers a significant loss in benefits, leaving families worse off or stuck in the same place. Sutherland Institute research found that 43 percent of Utah’s safety net population turned down work, including refusing job offers or extra hours, to avoid triggering a benefits cliff, with Medicaid as a major driver.

Too many Medicaid recipients reach a point at which they perceive working harder and earning more as making themselves worse off, not better, creating a perverse incentive to stay below an artificial income ceiling.

Work incentives matter, but if we ignore work disincentives, we’re only taking a half-step forward.

The second blind spot reformers sometimes have is the assumption that the answers are found in Washington. Congress should instead encourage, not override, state innovation and customization in its pursuit of work requirements. This can be achieved by setting broad objectives with pro-work and fiscally responsible outcome targets within which states have some latitude to innovate.

Utah and some other states are pursuing a waiver for Medicaid work requirements for a targeted subset of able-bodied adults on the program. Utah’s unique one-door model positions it to connect this population with opportunities for civic engagement, education, training and work, all of which will help enhance their social capital, increase their earned income and ultimately empower them to work their way off Medicaid.

Utah is also actively working to address benefits cliffs.

This year, Utah lawmakers funded a pilot program to empower more families to successfully navigate the effects of benefit cliff and the transition from welfare to work-based self-reliance through better financial planning and enhanced mentoring.

Combining pro-work reforms with addressing work disincentives is essential and exemplifies nimble responsiveness and innovation that is more feasible at the state level. States can also respond more quickly to potential administrative issues with work requirements, ensuring the compliance process is efficient for individuals in the program.

Medicaid is a partnership between the states and the federal government. Any changes to the budget reconciliation bill should incorporate the potential for state-led reforms that respect work, address disincentives and fit local needs.

As the Senate takes up this bill and its attendant work requirement debate, it should revise the bill to advance a vision of welfare reform that affirms that (1) work elevates, (2) work disincentives are solvable, and (3) federalism is an asset — not a barrier — to getting it right.