Medicaid Work Requirements Set to Leave Millions Without Insurance

Due to confusion surrounding how to verify that they are working, millions of eligible enrollees in Medicaid could lose their coverage by 2027. The One Big Beautiful Bill Act, passed in July 2025, made headlines when it introduced these work requirements as part of its cuts to Medicaid, sparking concern that there could be major consequences regarding both individuals losing coverage and hospitals in rural and low-income areas that rely on Medicaid funding to survive.

The One Big Beautiful Bill Act Introduces Work Requirements

As part of the One Big Beautiful Bill Act that was signed into law earlier this year, lawmakers introduced a new provision to Medicaid eligibility. All people either enrolled in Medicaid or enrolling for the first time are required to verify their work status every 6 months.¹ The government requires that all of those on Medicaid have at least 80 activity hours per month unless they have a valid exemption.

“Medicaid enrollees subject to this requirement will have to report their work activities to their state Medicaid program and figure out how to navigate the new reporting system. Since the budget law requires states to redetermine eligibility at least twice a year, this process will occur multiple times a year,” said Jonathan Oberlander, PhD, professor in the Department of Health Policy & Management at the University of North Carolina at Chapel Hill. “This will constitute a new administrative barrier to enrollment in Medicaid.”

Joel Cantor, ScD, professor of public policy and the founding director of the Center for State Health Policy at Rutgers University, explained further, “The bottom line is that it requires specific documentation of community engagement. Primarily work, but it could be childcare, it could be caregiving for a disabled child or parent, it could be volunteering, it could be education.”

Cantor also acknowledged that, for people who work independently or for smaller companies without a human resources department, this could create a huge paperwork barrier for people who are working but do not understand the process of applying, which is the major concern when looking at decreases in Medicaid enrollment.

According to the Congressional Budget Office,² this would likely cause a loss of 5.2 million adults on Medicaid by 2034 and would result in $324 billion in cuts in the same time period. Oberlander noted that these requirements only apply to Medicaid expansion states. All but 10 US states have expanded Medicaid coverage,³ which effectively makes this change nearly universal across the country. Implementing these changes could introduce a new host of problems.

The Immediate Effects of the Work Requirements

The new provision of Medicaid is set to go into effect by January 1, 2027, which leaves only a year and a half for those on Medicaid to adjust. Although some are exempt from needing to provide proof of work, millions are still set to be affected by the change.

"Exemptions include pregnant individuals, those receiving disability benefits, full-time students, and caregivers of young children under 13. While those with documented disabilities also are exempt, those most affected will likely be adults with significant health challenges who don't meet the formal disability criteria—exactly the population our research shows benefits most from coverage," explained Minal Patel, PhD, MPH, professor at the University of Michigan School of Public Health.

Patel is coauthor of a study that evaluated how Medicaid coverage affected employment among those who were unemployed when enrolling in the program. The study found that those enrolled in Medicaid experienced increased employment gains as their health improved,⁴ specifically in Michigan. This finding directly contradicts the move to keep those who are not working from enrolling in the program, said Patel.

“Our research found that Medicaid coverage itself helps people return to work—employment nearly doubled among enrollees whose health improved—suggesting coverage can drive workforce gains,” she said. Workforce recovery could also be affected if people were to lose their health care coverage, as Medicaid can help to support return to work, explained Patel.

Beyond individual effects, there are also potential downstream effects from hospitals in rural and low-income areas losing funding from Medicaid. William Schpero, PhD, MPhil, MPH, assistant professor of Population Health Sciences at Weill Cornell Medicine, noted that hospitals already at risk of closing will find an uphill battle when people lose coverage.

“While the [Act] includes a Rural Health Transformation Program that is designed to mitigate the financial effects of the bill for rural health care providers, it seems pretty clear that the size of the program is quite small relative to the projected financial effects of the law,” he said.

According to a KFF analysis, the $50 billion set aside in the Rural Transformation Program would only cover about 37% of what Medicaid is expected to lose through both the Medicaid work requirements going into effect and general cuts to Medicaid introduced in the bill.⁵ Half of this $50 billion is also going to be split evenly among all states, which may leave states that require more funding at a disadvantage compared with others.

Some Effects of Medicaid Work Requirements Going Under the Radar

Although there are some effects of the Medicaid work requirements getting more attention than others, there are still major effects that the requirements could cause to other aspects of health. Specifically, children on their parents’ plans could be heavily affected should their parent not meet the work requirements or is not able to fill out the form in a timely manner. Half of all children in the US are insured by either Medicaid or the Children’s Health Insurance Program.⁶

“Even though the [Act] work requirements target adults, there is strong evidence that health coverage and access to care among adults and children are linked,” said Schpero. “Prior research suggests that coverage losses among adults could introduce greater instability in coverage and harm health outcomes among children.”

Patel noted that the link between coverage and employment gains is an effect that can also go under the radar. “States will also face costly new verification systems that even managed care groups warn could block coverage for people already working,” she said. “By requiring work before providing the coverage that enables it, the policy risks reducing both coverage and employment—an outcome opposite its stated goal.”

Cantor also pointed out the timing of when these changes will be implemented, after the midterm elections in 2026. “Now we’re experiencing public reaction to the expiration of the extra subsidies for [the Affordable Care Act]. These are even lower-income people than that, but [the effect] won’t be felt until after the election next year,” he said.

He also pointed out that state Medicaid agencies are feeling more stress than before, as offices are already low on resources for their current work without adding more paperwork each year, and more reach out to those who need to prove their employment.

Even with the other outcomes going under the radar, Oberlander emphasized that the administrative issues surrounding imposing work requirements are the biggest hurdle moving forward.

“Many Medicaid enrollees who work and are eligible for the program will nonetheless lose Medicaid coverage because of the administrative complexity and burden of these requirements. This is set to begin January 1, 2027, which is not much time for states to get their systems up and running,” he said.

Variation among the states in how they will implement this change can also be a cause for concern when individuals are looking to enroll or renew Medicaid coverage, as advice for enrolling may not be universal. Making the means of enrolling different across state lines could make it more difficult for doctors and other health care professionals to help their patients access coverage.

Overall, the work requirements for Medicaid pose a significant hurdle to making sure all eligible individuals will get the coverage they need. With studies showing that Medicaid coverage led to better employment gains, this could not only affect health care across the country but also the economy. The introduction of more stringent work requirements for Medicaid enrollment and renewal is set to have major consequences throughout the country, and the full effect may not be known for years.

References

1. Hinton E, Diana A, Rudowitz R. A closer look at the work requirement provisions in the 2025 federal budget reconciliation law. KFF. July 30, 2025. Accessed November 4, 2025. https://www.kff.org/medicaid/a-closer-look-at-the-work-requirement-provisions-in-the-2025-federal-budget-reconciliation-law/

2. Estimated budgetary effects of public law 119-21, to provide for reconciliation pursuant to Title II of H. Con. Res. 14, relative to CBO’s January 2025 baseline. Congressional Budget Office. July 21, 2025. Accessed November 4, 2025. https://www.cbo.gov/publication/61570

3. Status of state Medicaid expansion decisions. KFF. September 29, 2025. Accessed November 4, 2025. https://www.kff.org/medicaid/status-of-state-medicaid-expansion-decisions/

4. Bonavitacola J. Medicaid coverage associated with employment gains. AJMC. October 31, 2025. Accessed November 4, 2025. https://www.ajmc.com/view/medicaid-coverage-associated-with-employment-gains

5. Levinson Z, Neuman T. A closer look at the $50 billion rural health fund in the new reconciliation law. KFF. August 4, 2025. Accessed November 4, 2025. https://www.kff.org/medicaid/a-closer-look-at-the-50-billion-rural-health-fund-in-the-new-reconciliation-law/

6. Rosenbaum S, Johnson K, Bodas M, Krips M, Jacobs F. Deep Medicaid spending cuts put health care coverage at risk for one of five enrolled children. The Commonwealth Fund. May 5, 2025. Accessed November 4, 2025. https://www.commonwealthfund.org/blog/2025/deep-medicaid-spending-cuts-put-health-care-coverage-risk-one-five-enrolled-children