CMS issues guidance for new Medicaid work requirements, states get funding

The people most likely to lose coverage are not necessarily those who stop working. They are the adults who get caught between monthly reporting rules, renewal deadlines and state eligibility systems that now must verify Medicaid work status on a far tighter timetable.

The Centers for Medicare and Medicaid Services issued interim guidance on June 1 that sets up a national work requirement for certain Medicaid adults, with states generally required to implement it by January 1, 2027. The rule applies to adults ages 19 to 64 in the ACA Medicaid expansion group nationwide, plus adults in Georgia and Wisconsin who receive coverage through partial-expansion waivers. Qualifying activities can include employment, education, work programs or community service, at 80 hours a month.

States now have to build the machinery to enforce it. CMS said it will provide $200 million in Government Efficiency Grants to help finance verification systems and administrative changes, and the agency said technology companies have committed more than $600 million in no-cost or discounted support. CMS said it intends to rely first on real-time electronic data, including medical claims, to check compliance, but beneficiaries will generally need documentation starting in 2028.

That shift puts paperwork at the center of the policy. CMS said eligibility has to be verified at least every six months or at renewal, though states may check more often if they choose. Before 2028, beneficiaries may be able to self-attest that they meet the standard. After that, the process is expected to become more document-heavy, adding a new layer of administration for states and a new burden for enrollees.

The guidance includes exemptions for pregnant women, postpartum enrollees, disabled beneficiaries and people considered medically frail. People who have already met similar work rules under SNAP food assistance are also exempt. CMS Administrator Mehmet Oz said the policy is meant to move able-bodied enrollees toward employer-sponsored coverage and preserve Medicaid for those most vulnerable.

Democrats argued the opposite, saying the requirement will make care harder to keep and will punish eligible people who cannot navigate the system. Representative Frank Pallone of New Jersey said many will lose coverage not because they do not work, but because they get trapped in paperwork.

The Arkansas experiment remains the clearest warning. CMS approved that state’s Medicaid work requirement on March 5, 2018, and it took effect on June 1, 2018. Research later found more than 18,000 people lost coverage, and policy analysts say the main lesson was not a surge in employment but a drop in enrollment driven by reporting barriers. That history now hangs over the federal rollout, where the success or failure of the policy may be measured as much by administrative compliance as by the work hours themselves.