Facing Funding Losses, States Call Out Big Businesses With Employees On Medicaid

Key TakeawaysNew Medicaid work requirements have some states calling out companies that shift health costs to employeesWork requirements are forecast to add more than 5 million to uninsured ranks by 2034Some workers may not satisfy the new work requirement, qualify for an exemption or have access to employer-sponsored coverage.THURSDAY, July 16, 2026 (HealthDay News) — As the Trump administration’s January deadline looms for states to enforce new Medicaid work requirements, some state lawmakers are turning the tables by pushing to publicly name the largest companies that have employees enrolled in the government program covering low-income and disabled people.California lawmakers seek to revive an expired law that would require the state to identify companies that employ 100 or more people and have employees enrolled in Medi-Cal, the state’s Medicaid program. Nevada has had a similar law in place since 2017, though a proposal for one in Oregon stalled when its legislative session ended in March.The California bill author, Democratic state Sen. Lola Smallwood-Cuevas, said she is deeply troubled by what is going to happen when work requirements kick in. According to the state, nearly 5 million out of more than 14 million residents on Medi-Cal will be subject to the rule.“We think this is a bill that’s about fairness,” Smallwood-Cuevas said. “It’s a basic principle that taxpayers deserve transparency about which large employers are shifting their healthcare costs onto the public.”Large employers that regularly top Nevada’s list, such as Walmart and Amazon, have said that the state included part-time and seasonal workers in their counts and that their full-time hourly employees make too much to qualify for Medicaid.Walmart spokesperson Katrina Proffitt said that the company offers affordable medical coverage to most employees, including eligible part-time workers, and that most of its plans include no-cost virtual care options.“Healthcare affordability and access to quality care remain real barriers for many Americans, and Walmart continues to be committed to being part of the solution,” Proffitt said.The push to name and shame companies reflects dueling narratives about the biggest abusers of the joint state-federal Medicaid program, which reached nearly $932 billion in government spending in 2024. The Trump administration, led by Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz, has called out blue states for not doing enough to fight insurer fraud and abuse. State Democratic leaders, meanwhile, are pushing back by calling attention to big employers that don’t offer affordable health benefits, which leaves taxpayers subsidizing healthcare costs for the low-wage workforce.Some states have considered financial penalties. Democratic New Jersey Gov. Mikie Sherrill signed a bill in June to fine businesses that have at least 50 Medicaid-enrolled employees. Companies with 50 to 249 workers on Medicaid will pay $325 a year per person, and those with at least 500 will pay $725.Bills that would have penalized companies with workers enrolled in Medicaid failed in Washington state and Colorado this year.In Sacramento, California, Democrats want to figure out a way to make large businesses pay for their employees’ health coverage. State lawmakers struck a deal with Democratic Gov. Gavin Newsom, who is contemplating a presidential bid as he wraps up his final year in the governor’s office, to explore tax options. Any tax hike would be up to the new governor.States face losing billions of dollars under HR 1, the GOP tax-and-spending law known as the One Big Beautiful Bill Act, notably through a provision that requires nondisabled Medicaid enrollees ages 19 to 64 in most states to prove they are working, volunteering or going to school at least 80 hours a month to keep their coverage.Yet federal work requirements are projected to increase the number of uninsured people nationwide by more than 5 million by 2034, according to the Congressional Budget Office. Nebraska and Montana have begun enforcing the rule.One health policy researcher said employer Medicaid reports highlight the lack of affordable healthcare options available to low-wage workers. More than half of adults enrolled in Medicaid who don’t have dependent children already meet the 80-hour-a-month requirement or face challenges that would likely qualify them for an exemption, according to KFF.“There’s a whole set of people who are working — they may not satisfy the work requirement provisions, they may not get the exemption that they’re qualified for and they don’t have access to that employer-sponsored insurance either,” said Edwin Park, a research professor at the Center for Children and Families at Georgetown University.Employers Push BackWhile employer lists haven’t succeeded in bringing down Medicaid costs, supporters say measuring the burden can be the first step and help lawmakers make the case for further action.In Nevada, Amazon has employed more Medicaid enrollees than any other company since 2020, according to the state’s report published in January. For state fiscal year 2025, Walmart, the Clark County School District, the state government and Tesla rounded out the top five.Employers have argued that the reports are misleading because they have included part-time and seasonal employees. The state’s latest report includes only full-time employees, plus those who could not be confirmed as either full- or part-time employees.That came to 4,914 Amazon employees and 3,503 Walmart workers in Nevada on Medicaid in 2025.There are no penalties for companies on the list.Amazon said it pays its workers more than double the $7.25-an-hour federal minimum wage and noted that Medicaid eligibility is based on household income and size rather than an individual’s wage. That means two employees who earn the same pay may have different eligibility depending on whether they have children or live with parents.“Pointing fingers at Amazon over Medicaid is a red herring,” said spokesperson Alisa Carroll. “What really needs to happen is a significant and large increase in the federal minimum wage — that would be a big boost for American families.”Nevada Medicaid spent nearly $950 million on healthcare for more than 133,000 full-time employees and more than 140,000 of their dependents. While the total amount spent dipped in fiscal year 2025, the average cost per member per year increased by nearly 17%.Yvanna Cancela, a former Nevada lawmaker who sponsored the legislation on Medicaid work reports, said the annual reports force an important conversation “about whether or not this is the kind of economy we want and whether or not it is right or just that people who work full-time don’t make enough to have health insurance.”A Fraying Safety NetHealth researchers say that uninsured people delay or skip using healthcare and that their children may end up losing coverage, too.One analysis found that more than 2 million fewer children were enrolled in Medicaid and the Children’s Health Insurance Program this April than in January 2025. California is among the states with the steepest enrollment losses among children.The loss in healthcare coverage among residents will be compounded by the loss of public food assistance benefits, Smallwood-Cuevas said. Her bill is pending in the legislature.She compared Medi-Cal to a trampoline that has become a “very tattered kind of fishnet” overwhelmed by people falling into it. President Donald Trump’s spending-and-tax law pulls and rips at the safety net, she said.When people lose food assistance and health benefits, they must choose between paying for medicine and paying for rent, Smallwood-Cuevas said.“We’re going to see more people in their cars, more people on the street, and a lot more people in the emergency room,” she said. “That is dangerous for all of California.”More informationSmall businesses can learn more about providing health insurance to employees at HealthCare.gov.About KFF Health NewsKFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling and journalism..What This Means For YouCome Jan. 1, Medicaid recipients in 44 states and Washington, D.C., will be subject to work requirements..Sign up for our weekly HealthDay newsletter

Facing Funding Losses, States Call Out Big Businesses With Employees On Medicaid

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