The Centers for Medicare & Medicaid Services (CMS) under the Trump administration issued final rules on June 1 outlining how states must verify that millions of Medicaid expansion enrollees meet new work or activity requirements. These rules mandate that qualifying individuals demonstrate employment, job training, volunteering, or educational participation, with most states set to enforce compliance starting January 1, 2027.
What Happened
CMS released the final Medicaid work requirement regulations as stipulated by the 2022 GOP tax and spending bill known as the One Big Beautiful Bill Act. These rules affect Medicaid expansion populations, primarily low-income adults without dependents, across more than 40 states including Georgia and Wisconsin. Nebraska began enforcement in May 2023, Montana plans enforcement in July 2023, and Arkansas will start a soft launch with enforcement penalties delayed until 2024.
Key Facts
- The rules apply to approximately 18.5 million Medicaid expansion enrollees nationally.
- Qualifying activities require 80 hours per month, including paid work, schooling (at least six credit hours per semester), volunteering, or unpaid internships.
- Children, pregnant people, individuals receiving Social Security disability benefits, and medically frail people are exempt.
- States must initially accept “self-attestation” of work hours or medical exemptions in 2027 and one time in 2028; subsequently, proof such as pay stubs or medical documentation may be required.
- States face financial penalties if they incorrectly exempt enrollees who do not meet the criteria, potentially leading to stricter documentation requirements.
- Enrollees must be notified twice—once by mail or email and once by another communication method—before enforcement.
Why It Matters
The rules significantly impact Medicaid expansion enrollees, potentially leading to coverage losses for those unable to meet the new work or activity criteria or navigate administrative requirements. Given the administrative burden of proof, especially for medically frail individuals, vulnerable populations may face disenrollment despite eligibility. The policy shifts Medicaid toward conditional eligibility linked to productivity or engagement in specified activities.
Background
Medicaid expansion, authorized under the Affordable Care Act starting in 2014, allowed states to extend Medicaid eligibility to low-income adults without dependents. The One Big Beautiful Bill Act in 2022 introduced requirements for some enrollees to prove workforce engagement or related activities. Previous efforts to impose work requirements faced legal challenges and delays. This final rule sets clearer enforcement guidelines for states.
Analysis
CMS Deputy Administrator Dan Brillman emphasized the goal of protecting vulnerable populations through strong exemptions while enforcing compliance. CMS Administrator Mehmet Oz stated the work requirements aim to prioritize people “truly in need” by reducing program crowding. However, health policy researchers such as Morgan Henderson of The Hilltop Institute warn that cumbersome reporting burdens may lead to significant coverage drop-offs. Jennifer Tolbert of KFF highlighted that states’ caution to avoid penalties may tighten exemption criteria, potentially excluding eligible individuals.
Who Is Affected
- Approximately 18.5 million Medicaid expansion enrollees across over 40 states.
- State Medicaid agencies must adapt IT systems and staffing to implement the new rules effectively.
- People currently exempt include children, pregnant individuals, disabled beneficiaries receiving Social Security, and medically frail persons.
- Enrollees in Nebraska, Montana, Arkansas, Georgia, Wisconsin, and other expansion states will be directly affected by the enforcement phases.
What Remains Unclear
- How consistently states will apply the “medically frail” exemption, as definitions may vary significantly by state.
- The full extent of coverage losses resulting from administrative challenges or documentation requirements.
- The effectiveness of automated systems and data sharing in reducing reporting burdens for enrollees.
What Comes Next
- Most states plan to begin enforcement of work requirements on January 1, 2027, with some already initiating earlier phases.
- States will continue developing IT and staffing infrastructure to support monitoring and verification processes.
- Federal oversight and potential financial penalties for states incorrectly granting exemptions or failing to enforce requirements.
Sources
This article is based on reporting and publicly available information from the following source:
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