How States Can Mitigate the Harm of New Medicaid Work Requirements

Health care is a fundamental basic need that helps people stay healthy enough to work, participate in training, and advance in their careers. But for the first time ever, Congress has mandated states to implement Medicaid work reporting requirements nationwide through the 2025 passage of H.R. 1, often referred to as the “Big Beautiful Bill.” This means certain adults will have to regularly prove they are working, enrolled in school or training, volunteering, or participating in another approved activity in order to keep the health care that allows them to train, work, and support their families.

While some lawmakers justify these policies by suggesting they lead to employment, the evidence shows that is simply not true. Arkansas offers a cautionary tale. After the state implemented work reporting requirements in 2018, eligible people lost coverage and faced widespread confusion, without any meaningful increase in employment. Health care was taken away from people who were already working, learning, caregiving, or otherwise eligible—not because they refused to work, but because of the difficulty in navigating cumbersome paperwork and reporting hurdles.

This blog outlines steps states can take now to reduce harm, protect eligible workers and learners from unnecessary health care losses, and connect people to meaningful education and training opportunities.

What’s Changing Under the New Medicaid Rules

Under the new federal rules released by the Centers for Medicare & Medicaid Services (CMS), states must implement Medicaid community engagement requirements, commonly known as work requirements, no later than January 1, 2027.

The policy applies to certain adults ages 19 through 64 who are enrolled in Medicaid expansion coverage or similar coverage through Medicaid demonstration programs. Children, seniors, people who are pregnant, people enrolled in Medicare, and some people with significant health needs or caregiving responsibilities may be exempt.

Affected people will typically need to complete at least 80 hours per month of qualifying activities to maintain their health care benefits. Those qualifying activities, as determined by CMS guidance, can include paid work, education or training, community service, participation in certain workforce programs, or a combination of approved activities. Where states have discretion is around implementation details, such as what specific community service opportunities qualify, or which state/local workforce programs are available.

What States Should Do Now

As states prepare for Medicaid implementation, they should focus on reducing coverage loss and helping people keep their health care so that they can stay in training and/or keep their jobs. States should:

• Align health care, workforce, and education systems to support workers. States should connect Medicaid-eligible workers and learners to meaningful employment, education, training, and supportive services to not only meet their work requirements but improve their economic mobility.

• Use Medicaid data to support proactive outreach. States should analyze their data on people receiving Medicaid to identify people who might benefit from workforce and education programs, and use that information to connect them to available services.

• Train Medicaid staff to connect people to workforce and education opportunities. Medicaid workers processing eligibilities should understand the free or low-cost programs available to state residents, including Workforce Innovation and Opportunity Act (WIOA), Supplemental Nutrition Assistance Program Employment and Training (SNAP E&T), community college programs, adult education, and community-based training. Staff should be equipped to connect people to quality training and career pathways that lead to in-demand jobs while helping them maintain their health care.

• Invest in the capacity needed to make alignment meaningful. Where additional staffing, technology, training, or cross-agency coordination is needed, states should invest in the necessary resources, and advocates should support those investments.

• Effectively communicate and leverage exemptions and hardship exceptions to prevent unnecessary coverage loss. Under the CMS rules, states can provide exemptions for adults who are medically frail, pregnant, or caregiving, as well as short-term hardship exceptions for people receiving certain medical services, living in areas with high unemployment or declared disasters, or traveling for serious medical care. States should make these protections easy to access and clearly communicate them to affected people.=

Looking Ahead: Ensuring that Basic Needs are Seen as Workforce Needs

Strong workforce policy helps people gain skills, connect to good jobs, and advance economically. Work reporting requirements do not create these opportunities. Policymakers should focus on reducing barriers to employment and training, connecting people to meaningful skill-building opportunities, and making sure workers and learners can maintain the health coverage they need to stay healthy, participate in training, and keep their jobs.

As states implement these new requirements in the new year, they should also monitor and publicly track outcomes. Even with additional resources, these policies will place new demands on eligible workers, workforce providers, navigators, and community-based organizations. States should report on coverage losses, the cost to taxpayers, exemption approvals and denials, call center wait times, appeal outcomes, and demographic impacts so policymakers and the public can assess whether the policies are harming or protecting eligible people’s coverage.

National Skills Coalition will continue working with state partners to elevate what’s working, share implementation challenges, and advocate for policies that help workers build skills and stability. Listen to our June 17 network call for federal updates, a review of the CMS guidance, and more about what these changes mean for states.

For more on NSC’s stance on Medicaid, skills training, and workforce development, see our previous resources and blogs: “The Cost of Work Requirements Fact Sheets,” and “Why New SNAP Work Requirements Undermine Workers and States.”