Story Highlights
- The Trump administration published a highly anticipated document laying out the rules for sweeping new requirements that many adult Medicaid beneficiaries work or attend school in order to qualify for coverage; states have only a few months before the work requirements are supposed to take effect.
- Next year, Trump’s One Big Beautiful Bill Act could require roughly 18.5 million adults across 42 states and the District of Columbia who receive Medicaid benefits to prove they are working or participating in a similar activity to keep their health coverage, unless they qualify for an exemption.
- Up to 7 million people could lose coverage by 2028 due to the requirement, according to the Urban Institute, not because they are ineligible but because of paperwork burdens and complex verification processes.
What Happened
The Centers for Medicare and Medicaid Services published the rules for sweeping new requirements that many adult Medicaid beneficiaries must meet in order to qualify for coverage. The rule establishes standards states must use to implement Medicaid work requirements, including who is exempt from the requirements, how to verify exemptions, and state reporting requirements.
Under the interim final rule, able-bodied Medicaid beneficiaries over the age of 18 will be required to document that they have completed at least 80 hours per month of work or community service, or be enrolled in an education program, starting January 1, 2027. The work requirements will exclude parental guardians or family caregivers of young children, people with disabilities, disabled veterans, those who are medically frail or disabled, pregnant women, and inmates.
Medicaid administrators and advocates say they were shocked by what they described as harsh directives governing the medical frailty exemption. Much of the concern centers on the requirement that individuals prove they are unable to work due to a specific medical condition, a standard that health policy experts say will be more difficult to meet than anticipated, meaning that more sick and disabled people are likely to lose their Medicaid coverage.
CMS Administrator Mehmet Oz defended the policy, framing it as a path to prosperity that gets people back into the workforce. He argued that many able-bodied Americans on Medicaid spend hours watching television or doing nothing each day. States must assess the severity of an individual’s condition to determine whether they can stay on Medicaid without working, a standard that critics say makes it harder for genuinely ill people to remain enrolled.
The changes in the rule will force states to make time-consuming and costly changes to their eligibility systems, redo notices, and rescind prior communications with beneficiaries. The Trump administration previously acknowledged that upgrading state Medicaid eligibility systems is coming at a significant cost, with major government contractors including Deloitte, Accenture, and Optum having promised discounts through 2028 to help states adjust.
Why It Matters
The Medicaid work requirements represent the most consequential domestic policy implementation milestone of 2026. With 68 million Americans currently enrolled in Medicaid, even a modest percentage of coverage losses translates into millions of people without health insurance. The Congressional Budget Office had previously estimated that the work requirements alone would account for roughly one-third of all Medicaid spending reductions included in the One Big Beautiful Bill Act, reducing federal outlays by approximately $326 billion over a decade.
Medical groups and patient advocates have uniformly opposed the rule. Advocates for people with serious illnesses, including cancer and HIV, say the strict Medicaid work rules will likely put ongoing treatments in jeopardy. States must put the work requirements into effect by January 1, and health policy experts say it typically takes states months or years to make the kinds of system changes now required in just seven months.
Research shows that most adults who can work and receive Medicaid already do so, since Medicaid pays for health care rather than providing direct income. About one in five people are not meeting the 80 hours-per-month threshold, and this population faces real barriers to workforce participation including inability to find jobs, layoffs, or having recently retired. Opponents have argued that the practical effect of the rule is not to encourage work but to create administrative barriers that cause eligible people to lose coverage through paperwork failures rather than ineligibility.
The rollout of these requirements is occurring simultaneously with a series of other Medicaid changes from the One Big Beautiful Bill Act, including more frequent eligibility redeterminations and new cost-sharing requirements scheduled to begin in the coming months. The cumulative effect of these overlapping changes creates an environment in which states must transform their Medicaid programs on multiple fronts at once.
Economic and Global Context
Health care costs remain one of the top concerns for American families, and 2026 is shaping up to be one of the worst years in recent memory. Americans with employer-sponsored insurance are facing the largest premium increases in 15 years, while those with Affordable Care Act marketplace plans are bracing for the steepest premium increases since 2018.
Rising health insurance premiums are also being driven in part by the Trump administration’s tariff policy and the uncertainty it creates. A Georgetown University Center on Health Insurance Reforms analysis of marketplace regulatory filings showed that insurers across multiple states cited tariffs, including those expected on prescription drugs, as a factor in their proposed 2026 rates.
The Congressional Budget Office estimated that as a direct result of the new health care law, 10 million people will be forced off their health insurance. An additional 5 million people are expected to lose coverage because enhanced ACA premium tax credits were not extended in the bill and are set to expire. These projected losses have major implications for hospitals, community health centers, and emergency rooms, which will face rising levels of uncompensated care.
Implications
For states, the coming months represent an enormous administrative challenge. States will have to undo work already done and rebuild their eligibility systems to comply with the new rules. Much of the verification runs through state computer systems that assess whether low-income people qualify for Medicaid and other safety net programs — technology often built and run by private companies under contracts routinely worth hundreds of millions of dollars.
For individual Medicaid enrollees, the most immediate task is understanding the new requirements and what documentation they must provide. Advocacy groups are expected to mount state-by-state campaigns to help people navigate the new system, and litigation challenging the work requirement rules is anticipated. Comments on the interim final rule remain open until July, and the government has the option to make changes before finalizing it.
For congressional Republicans, the work requirements represent a key commitment to their political base — a tangible demonstration that the One Big Beautiful Bill Act is restructuring the welfare state in line with conservative principles. Democrats, meanwhile, will use every instance of coverage loss and hospital closure to build their midterm campaign case that Republican governance is harming ordinary Americans. How the Medicaid work requirement rollout unfolds will be one of the defining domestic policy stories of the second half of 2026.
Sources
“Trump administration shares new work requirements for Medicaid recipients”
