GOP Rep. Harrigan Targets Gambling Loophole in Medicaid Work Requirements

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Rep. Pat Harrigan (R-NC) has introduced a bill aimed at closing a loophole that allows individuals to use gambling winnings as income to meet Medicaid work requirements, according to exclusive reporting by Breitbart News. The proposed legislation, titled the ‘No Gambling for Medicaid Act,’ seeks to amend Title XIX of the Social Security Act to exclude certain gambling winnings from being counted as monthly income under the Medicaid program’s community engagement requirement.

Medicaid Work Requirements Set for 2027

The introduction of Harrigan’s bill comes as the One Big Beautiful Act (OBBA) mandates that certain non-disabled adults aged 19 to 64 covered under Medicaid must satisfy a work requirement beginning on January 1, 2027. Under the OBBA, one way to fulfill this requirement is by demonstrating a household income of at least $580 per month.

This income threshold is calculated by multiplying the federal minimum wage of $7.25 by 80 hours of work, resulting in $580. The Centers for Medicare and Medicaid Services (CMS) issued an interim final rule implementing this new statutory requirement for Medicaid recipients, allowing states to determine how frequently recipients must demonstrate compliance with the work requirement.

Gambling Winnings as a Work Requirement Loophole

The one-pager accompanying Harrigan’s bill highlights the issue of counting gambling winnings as income for Medicaid qualification. While this is already a standard practice for tax purposes, the new work requirements could create a separate loophole. The bill explains that individuals can reach the $580 income threshold without experiencing significant net losses by strategically betting on both sides of a single event at different sportsbooks.

For example, a recipient could show $580 in gross winnings without substantial net losses, and this would satisfy the requirement for a full six-month recertification period. The bill argues that this could incentivize more frequent and targeted gambling, undermining the purpose of the work requirement, which is to encourage work and community engagement.

Rep. Harrigan’s Opposition to Gambling as Work

In a post on X from October 21, Harrigan shared an opinion piece written by Kevin Corinth, a senior fellow at the American Enterprise Institute, titled ‘Gambling and the Medicaid Work Requirement.’ In his post, Harrigan wrote, ‘If Washington thinks placing bets counts as holding a job, Washington has lost its mind. A loophole in Medicaid’s new work requirements could let someone qualify by gambling just $580 a month, and I’m introducing legislation to shut it down.’

Corinth’s article explains that while the new requirement has sparked controversy, it is relatively flexible. Most states plan to require at least one qualifying month during each six-month period, meaning recipients need to prove they’re working two months out of the year. The requirement can be satisfied through work, training, volunteering, or enrolling in school. Alternatively, a household income of at least $580 per month can suffice, calculated using the federal minimum wage.

Impact of Gambling Winnings on Medicaid Qualification

According to the one-pager, gross gambling winnings are already counted as income for Medicaid qualification, similar to how they are treated for tax purposes. Under the CMS interim final rule, these winnings will also count toward satisfying the Medicaid work requirement. This means that even if a recipient experiences losses in their bets, the gross winnings are still counted, as long as they are made during different ‘sessions.’

For instance, a wager that wins $100 in profit and a separate wager that loses $100 would still yield gross winnings of $100, even though there was no net gain. This could allow individuals to meet the $580 income requirement without engaging in substantial work or other qualifying activities.

Legislative Efforts to Close the Loophole

Harrigan’s bill aims to address this issue by defining ‘covered gambling winnings’ as a prize, award, or money from a bet or wager. The bill would also protect professional gamblers by exempting wagering engaged in as a trade or business. This would ensure that the work requirement is not undermined by the use of gambling as a means to meet income thresholds.

The introduction of this bill comes at a time when the Medicaid work requirements are a contentious topic. While some argue that the requirements are necessary to promote work and reduce reliance on government assistance, others, including Harrigan, believe that the current system allows for loopholes that could be exploited.

Broader Implications for Medicaid and Work Requirements

The debate over Medicaid work requirements reflects broader discussions about the balance between encouraging work and providing necessary support for those in need. Critics argue that the current system may disproportionately affect low-income individuals who are already struggling to meet basic needs. They also raise concerns about the potential for abuse of the work requirements, particularly through the use of gambling as a means to meet income thresholds.

As the bill moves through the legislative process, it will be important to assess its potential impact on both Medicaid recipients and the broader healthcare system. The success of the legislation will depend on its ability to close the gambling loophole without inadvertently creating new challenges for those who rely on Medicaid benefits.

Source: Breitbart