How Sick Is Sick Enough? New Medicaid Work Rule Worries Patient Advocates, States.

The 40 plus states that expanded Medicaid under the Affordable Care Act thought they knew what to expect when Republican’s One Big Beautiful Bill Act outlined last year which low-income residents might be shielded from work requirements because they are too “medically frail.”

Last week they were hit with a big surprise.

The Trump administration released a final rule saying Medicaid recipients exempted from the employment requirements for medical frailty must prove every six months that they remain too ill to work. The federal work mandate goes into effect Jan. 1.

Patient advocacy groups, physicians and state officials say they fear that chronically ill people, whose ability to work often fluctuates, will fall through the cracks and become uninsured at a time when they most need care.

“Having a work requirement for patients with cancer, frail or not, puts them in a precarious position,” said Ben Pezeshki, a primary care physician and medical director of the clinic Sequoia Quality Health in Los Angeles. “Sometimes they can’t keep a job because of their illness and if they lose their job and their coverage, then Stage 1 becomes Stage 4.”

It also remains unclear how the guidance will be enforced. Recipients may self-attest that they are medically frail to receive care next year, but beginning in 2028 they will be allowed to do that only once before showing documentation biannually to keep their coverage.

Under the federal rules released by the Centers for Medicare and Medicaid Services on Monday, states are required to choose which “serious or complex health conditions” could exempt someone from the work requirement — something states had already begun doing as they rush to meet the January deadline. For example, in Nebraska, which decided to begin early enforcement of the rules on May 1, officials made a nearly 300-page list of ailments.

But the Trump administration stressed this week that merely having one of those conditions isn’t enough, and surprised states by adding an additional, stricter test that goes beyond what Congress approved last year. That is: Does a person’s health condition prevent them from working, volunteering, caregiving or studying at least 80 hours per month?

The Trump administration argued in the text of the rule that this will prevent people who have health conditions which don’t significantly impair their ability to work from getting a free pass. CMS said in a statement to POLITICO that states, not doctors, are “responsible” for figuring out “whether an individual is subject to the work requirement.”

But Jennifer Hoque, the associate principal on policy for the American Cancer Society Cancer Action Network, was one of many patient advocates to warn that there is no way to make that determination without putting new burdens on sick people and their doctors.

“States do have some ways to tell whether someone has a diagnosis, and we have heard states are working on code lists and lists of diagnosis codes and claims data they can use to try to identify people automatically who would have this exemption,” she said. “But adding an element of ‘unable to work’ — nobody knows where that data will come from.”

Several advocacy groups, such as the American Lung Association and AIDS United, plan to submit comments over the next 60 days pleading with CMS to change its approach and allow people with serious illnesses to be exempt without having to prove they are too medically frail to work. They are also asking lawmakers on Capitol Hill to join this pressure campaign as both patient advocates and state officials look into potential legal challenges.

But for now, the information vacuum from CMS has left state officials, clinics and patient advocates worried that it will ultimately fall to individual doctors to evaluate each Medicaid enrollee seeking a medical exemption from the work rules and determine whether they are physically able to work.

Not only would this be a major burden on doctors’ time — particularly in areas with physician shortages where appointments are already hard to come by — but it asks doctors to make a determination they were never trained to make.

“Physicians are increasingly being asked to function not simply as clinicians but as arbiters of this very complex bureaucratic eligibility,” said Vin Gupta, a pulmonologist and the Managing Director of Health Innovation at the health care consulting firm Manatt, which is advising several states on the implementation of the work requirements.

Gwen Nichols, the chief medical officer for the advocacy group Blood Cancer United and a former oncologist, said cancer doctors are used to using an “Activities of Daily Living" scale to determine whether someone needs a nurse or home health aide to help them with basic tasks like getting dressed and going to the bathroom.

“That is to assess whether someone needs additional care at home, not whether they can work,” she said.

Other doctors said it’s much easier for them to evaluate people for short-term disability, which involves predicting how long they will need to recover from an accident or procedure, than to figure out whether they can work — especially without knowing what kind of jobs are available to a particular patient.

Another wrinkle: the ability of chronically ill people to work can vary from month to month, or even from day to day, making it difficult for doctors to make that call.

“For somebody with COPD or asthma or heart failure, or you name it, any chronic condition, some days are better than others,” said Gupta. “Some stretches allow for work, other stretches will not allow for work, so how does that jive with the six-month [eligibility checks]?”

HIV advocacy groups, which have spent months lobbying the Trump administration for a blanket exemption from the work requirement for people with the virus, are additionally worried that stigma and bias within the medical community could hurt patients’ ability to get an exemption.

“The network of providers who are trained and competent at providing HIV care and HIV prevention is one that is shrinking,” said Carl Baloney, the leader of AIDS United. “So undoubtedly it's going to create an uneven landscape for folks, depending upon who their provider is and what their attitudes are toward HIV.”

And if people with HIV lose their insurance and can no longer afford the drugs to keep their viral load suppressed, he added, that puts not only the patient but the broader community at risk.

Out of the exam room

Taking the decision out of the hands of doctors, meanwhile, could solve some problems while creating others.

The Trump administration pledged to take a “data-first” approach to the work rules in order to minimize the burden on both state governments and patients.

Before the federal guidance came out this week, state officials thought that meant they could rely on diagnosis codes they already have access to when evaluating whether someone should receive a “medically frail” exemption, thus ensuring low-income residents don’t have to do anything to keep their Medicaid.

More than a dozen states recently told POLITICO they were already spending millions to tens of millions of their own funds to hire staff and update their tech systems to be able to review that data and give patients who feel they were improperly denied an exemption a way to appeal.

The rules released on Monday, however, were a “departure from previous federal direction,” said Anthony Cava, a spokesman for California’s Department of Health Care Services, which manages Medicaid. “We are concerned about increased administrative burdens and the real risk that eligible people, particularly those with serious and complex medical needs and disabilities, could lose coverage.”

It’s not clear how states can use existing data to meet the Trump administration’s additional requirement of providing that someone’s condition impairs them from working, particularly when they don’t know what kind of jobs are available and whether someone has the physical capacity for them.

“If somebody has diabetes and that's led to them getting cataracts, are they going to have to prove that they're not able to find a job for somebody who's visually impaired?” asked Amy Behnke, the CEO of the Health Center Association of Nebraska, the state’s network of community health centers that provide services for a lot of the Medicaid population. “What are all of these steps that are going to come along with this?”

State struggles

Doctors, patient advocates and state officials warn that many people are likely to lose Medicaid coverage whether states come up with an automatic process for evaluating these exemption requests — for example, by counting the number of medical services a person used over the last year — or leave it up to the judgment of individual physicians.

“Who is going to make those decisions?” asked Sarah Maresh, the program director for health care access at the nonprofit Nebraska Appleseed, which is supporting patients subject to the work requirement the state began enforcing on May 1. “Our providers are already strapped for time and buried in paperwork. But we’d be even more worried about a state caseworker making that determination when they’ve never even met the person.”

CMS has yet to clear up that confusion.

The agency did not respond to questions from POLITICO about whether states can use insurance claims data to determine whether someone is “medically frail.” Asked that question directly on a press call on Monday, Director of Medicaid Dan Brillman demurred, telling reporters: “If your condition significantly impairs your ability to engage in work…then you are likely not subject to the work requirement.”

CMS added in a statement to POLITICO that if a state can’t figure out whether someone on Medicaid is too sick to comply with the rules, they have to give that person 30 days to “demonstrate compliance or show that the requirement does not apply to them.”

But the agency did not answer a follow-up question on what documents in particular someone would need to show in that event.

“It is unclear how states are supposed to interpret that operationally, and they do not have time to wait around and find out,” said Hannah Katch, a former senior adviser for the federal Centers for Medicare and Medicaid Services under President Joe Biden and former leader of California’s Medicaid program.

States could try to use various databases to determine the severity of someone's illness, she added. But if the Trump administration doesn't allow them to do that or they can't make the technology work, "people will either need a doctor's note or need to somehow manually upload their medical record for review by a caseworker or someone on the other end, which is a whole other huge administrative challenge.”

The work requirements only apply to individuals aged 19 to 64 who qualify for coverage under the Medicaid expansion, which offers insurance for individuals who make up to 138 percent of the federal poverty level, or about $21,000 for a single person and $44,000 for a family of four.

There are several exemptions beyond medically frail, such as if the beneficiary is pregnant or has a child under 13 years old.

There are likely 26.1 million individuals who could be impacted by the requirements, according to an analysis of 2023 Medicaid data by the health research organization KFF. These individuals do not have a disability and would likely have to meet the requirement, the analysis found.

Of those 26.1 million, 11 percent, or nearly 3 million, said they were unable to work due to an illness or disability. Most were already working — 44 percent full time and another 20 percent part time. The remainder don’t work for a variety of reasons, including 12 percent who were caregiving, 10 percent enrolled in school and 8 percent who were retired or unable to find work.

Some top Republicans cheered the rule after its release and appear unlikely to request changes.

“Not only do these requirements protect taxpayers, but they actively help to lift Americans out of poverty,” said Rep. Brett Guthrie (R-Ky.), chairman of the powerful House Energy & Commerce Committee, in a statement on Wednesday.