Medicaid Work Requirements Go Live In Two Months. Many States Won't Be Ready.

With a looming Jan. 1 deadline for states to implement Medicaid work requirements, some state officials are warning that they won’t be ready.

Some, like Louisiana, still don’t know how to verify which low-income residents deserve to keep their health insurance because they’re enrolled in school.

Others, like Missouri, have no way to automatically verify who has a medical condition that prevents them from working, meaning they will have to demand doctors’ notes or other proof from thousands of enrollees.

And still others, like Colorado, say they’ve only been able to automatically check the health and work status of a little over half of adults who get their insurance through Obamacare’s Medicaid expansion. That means they will have to request paperwork from the remaining 175,000 people.

Such complications will inevitably cause new and renewing enrollees to lose coverage even if they are working or have a legitimate exemption, state officials and the consultants working with them say.

“I don't know of a single state that has tested and confirmed it can protect coverage for eligible people with Medicaid,” said Hannah Katch, a former senior adviser for the federal Centers for Medicare and Medicaid Services under President Joe Biden and a former leader of California’s Medicaid program who is working with several states as they enact the work requirements.

“Every state I've talked to has shifted to phased implementation,” cherrypicking pieces of the rules to begin enforcing immediately while holding off on others until they have access to the right data, she said.

“Most plan only to implement the bare minimum by January, and they aren’t sure they can even meet that.”

The Centers for Medicare and Medicaid Services, the agency overseeing the work requirement rollout, did not respond to a direct question asking whether the agency will give states more time to meet the mandate, but said it is offering guidance and “ongoing technical assistance.”

Republicans’ One Big Beautiful Bill Act gave states about 18 months, beginning in mid 2025, to upgrade their technology, hire new staff, contact hundreds of thousands of people and figure out ways to determine who is meeting the work requirements.

Under the law, people ages 19 to 64 who receive Medicaid through the Affordable Care Act’s expansion of the program — typically, low-income people without young children — must work, volunteer or go to school for 80 hours a month to keep their benefits. But it categorically exempted certain people, including those living in areas with high unemployment and those too medically frail to work.

Exacerbating the tight implementation timeline, the Trump administration released a rule in June that imposed stricter enforcement than Congress required for recipients seeking an exemption for medical frailty. It said a diagnosis of cancer, HIV or other serious medical condition would not be enough to get someone out of the work requirement unless the person can supply additional proof that their condition significantly impaired their ability to work.

The regulation caught many states by surprise, forcing some to abandon months of completed work. It also prompted two lawsuits. 

Doctors warned for months that the policy would burden them with the sometimes impossible task of evaluating thousands of chronically ill patients’ ability to work.

Then, on Thursday, a federal judge in Boston struck down the Trump administration’s medical frailty rule and ordered states to go back to the original policy Congress passed in 2025, which said anyone with certain disabilities or medical diagnoses could claim an exemption from the work requirement.

States will still have to confirm that the person has the qualifying condition through medical claims data and other methods, but the person would not have to additionally prove it impairs their ability to work.

Another lawsuit, filed by medical groups and the city of Columbus, Ohio, remains pending in a Maryland federal court.

With just two months left before enforcement begins, officials in some states have been telling the Trump administration and their own residents to expect delays.

“I don't think on Jan. 1 we will be in our final landing place by any stretch,” Greg Woods, New Jersey’s Medicaid director, told reporters at the annual conference of the National Association of Medicaid Directors last week. “There are things from an IT systems perspective or from a program perspective we wanted to build but just couldn't get done by Jan. 1. So it's going to be a continuing process through 2027.”

Wiggle room

The Trump administration has so far ignored pleas from several states to hit pause on the rules or delay kicking people off Medicaid until later in 2027.

But POLITICO obtained a list of “mitigation strategies” CMS offered state officials this week — a tacit acknowledgement of widespread struggles in the leadup to the January deadline.

In the 13-page document, the agency urged states that aren’t able to set up their verification procedures in time to allow people on Medicaid to swear under penalty of perjury that they are working, volunteering, studying or caregiving at least 80 hours per month or have a medical condition that prevents them from doing so. States could accept that “self-attestation,” the agency suggested, until they’re able to obtain hard data.

CMS also recommended states only look back at just one month of employment data when determining if someone has met the threshold of at least 80 hours a month of work or other activities like caregiving or education.

The agency said that shorter “look back,” rather than the multiple months of review some states are requiring, could help ensure “timely processing.”

But Kinda Serafi, a partner at Manatt Health, a consulting firm working with states as they implement the rules, said several states couldn’t take advantage of those offers of flexibility even if they wanted to.

“The problem is, in those states that have the more restrictive documentation and look-back rules, that's because their state legislature demanded that they do that,” she said, adding that the Trump administration’s offer is “essentially unhelpful” because legislatures would have to vote to change their requirements in order for officials to use those strategies.

For instance, three states — Indiana, North Carolina and Idaho — have laws that mandate a three-month lookback period for both renewing and new Medicaid expansion enrollees, according to an analysis from the Georgetown Center for Children and Families.

Serafi added that state legislatures don’t reconvene until January, when the rules are already in full force.

She and other Medicaid experts also predicted that sick people will fall through the cracks even in the majority of states that have said they will accept self-attestation of medical frailty, warning that many could miss the notices sent to their homes or not understand how to fill them out.

“Once you get to a paper process, and once you start sending renewal forms to individuals, that's where the likelihood of coverage loss increases,” she said. “That's our biggest concern.”

‘Heavy lift’

While this week’s federal court ruling reduced the burden on states and doctors to individually evaluate patients’ medical frailty claims, states still have to develop a list of diagnostic medical codes that would qualify someone on Medicaid for an exemption. That is easier said than done.

It’s “a very heavy lift [for states] to develop a code list, vet that list and build that into your systems so that automatic verification can happen,” said Jennifer Tolbert, the deputy director of Medicaid and uninsured for the health research organization KFF.

The One Big Beautiful Bill Act requires states to use their own data systems to check patients’ eligibility before asking them to submit paperwork.

Yet Missouri said this week that its health department is still combing through thousands of diagnostic codes to see what meets the medical frailty definition, and won’t be ready to do that by January.

Jeremy Bowman, deputy director for the Missouri Department of Social Services, which oversees Medicaid for the state, said during a stakeholder call on Oct. 28 that it will instead allow people to self-attest to medical frailty throughout 2027 while it finishes putting a workable process for that exemption in place.

“It gives us a year or two to help identify systems, get technology to help match these codes with individual specific conditions,” he said.

Other states are scrambling to get their systems ready far beyond the medical frailty question.

Adela Flores-Brennan, Colorado’s Medicaid director, said during a stakeholder call on Oct. 26 that her department is missing both health and employment information for at least 175,000 people subject to the new rules.

“We don't have the data in our systems” to show whether people meet the work requirements or qualify for an exemption, she said. “These folks will need to pay close attention to letters and notices, and take action when it's their time to renew.”

Some states, however, expressed confidence that they will be ready to go. That includes Oklahoma, which said it is on track to have an automated process in place by Jan. 1, Kentucky, and Ohio — one of eight states that decided not to accept self-attestation.

Ohio’s Medicaid agency told POLITICO it will have an automated process in place to verify if someone is medically frail, using existing case information and electronic health records wherever possible. But when those records don’t exist, the agency said, it “may require provider documentation.”

Marvin Figueroa, the health secretary for Virginia, said the state will also be ready with an automatic process for determining eligibility. However, based on a recent meeting he had with community organizations in a rural part of Virginia, he is concerned that not enough people know about the looming work requirement.

“We are introducing another thing they need to do in a life that is already really complex and really hard,” he said of low-income people in far flung corners of the state. “In our rural communities, and urban [communities] have interesting challenges as well, this legislation will have a big impact and that big impact is coverage losses.”