New Medicaid Work Requirements Balance Integrity with Flexibility for the States

As part of the broader efforts to address waste, fraud, and abuse happening in our nation’s healthcare safety net programs, last year’s reconciliation law (H.R. 1) included one of the most consequential policy shifts to the Medicaid program in decades—work requirements. Now that the final guidance has been released, it is clear that the transition will be complex. However, the new requirements allow a lot of flexibility for the states while strengthening program integrity and better supporting individuals who can work.

On June 1^st, the Centers for Medicare and Medicaid (CMS) released the interim final rule providing guidance on how states should implement the new Medicaid work requirements. There is a comment period on the rule until July 31^st, and then it will officially go into effect. This rule applies to the able-bodied adult Medicaid population, which has been expanded under the Affordable Care Act in 40 states and Washington, D.C. Now, according to the interim final rule, Medicaid enrollees will be required to work, participate in a work program, attend school, volunteer, or some combination of these for at least 80 hours a month.

This aligns Medicaid with other assistance programs such as SNAP and TANF, which already have work requirements. Research shows that employment is a critical component to strengthen community ties, supporting personal independence and economic stability, and contributing to overall well‑being. The Office of the Assistant Secretary for Planning and Evaluation released a report estimating that the new Medicaid work requirement could lift 1.6 to 2.9 million people out of poverty.

This new rule has not come without controversy. It outlines several categories of exemptions to the work requirement, such as pregnant women, parents with dependent children, and those with medical frailty. Having a physical, intellectual, or developmental disability or a serious medical condition might qualify as medically frail. However, the final rule tells states to go beyond just confirming a person’s condition. They must also consider the severity of it.

In these instances, a person’s condition must “significantly impair their ability to comply with the requirement.” This standard is stricter than what some expected and is more difficult to verify than simply confirming a diagnosis. The states are already preparing to implement the new work requirement, and they now have a short timeframe to adjust their plans before the implementation deadline of January 1, 2027. However, it is important to note that there is intentional flexibility in the first year, giving states time to refine, test, and adjust their process.

For 2027, enrollees can self-attest to their medical frailty when they enroll or renew enrollment, including at their mid-year renewal. It is not until 2028 that enrollees can self-attest just one time. Only then, if the state cannot confirm the exemption with their own records, they must give enrollees 30 days to provide proof. If the enrollee loses coverage simply for not returning documentation on time, they can immediately reapply.

Not only is there extra time for states to work out this new process, but the rule gives states flexibility in design and implementation. States can define what “significant impairment” means, decide what process and documentation are necessary to verify it, and choose which qualifying conditions they will accept (91 Fed. Reg. 33372). This allows states to innovate and to learn from each other over the next year and a half.

The rule sets out a clear expectation that Medicaid must remain sustainable to support the most vulnerable who truly need help. The new rule aims to promote prosperity for those who are capable, and its success will depend on how states tailor their application. If states take full advantage of the flexibility and implement this rule thoughtfully, the work requirement can become not just a compliance exercise, but a meaningful step toward a more efficient, sustainable, and supportive Medicaid program.