Medicaid Work Requirements Threaten Coverage for Rare-Disease Patients and Other Vulnerable Beneficiaries

Beginning January 1 2027, Medicaid recipients in the 40 Medicaid-expansion states and the District of Columbia must meet an 80-hour monthly test of work, volunteering, or job-training to keep their benefits. The rule stems from the federal budget reconciliation bill signed by President Donald J. Trump last July, formally titled the One Big, Beautiful Bill Act (OBBBA).

The American Prospect

OBBBA’s Section 71119 mandates that most Medicaid enrollees either work, volunteer, attend school, or participate in a training program for at least 80 hours each month. The law includes an exemption for “medically frail” individuals, but the Centers for Medicare & Medicaid Services (CMS) issued an interim final rule on June 1 that adds a “significant impairment” test to that exemption.

The American Prospect

• Nebraska began enforcing the requirement on May 1 2026.

Medicaid Work Requirements Pose Challenges for Beneficiaries and Providers

• Montana and Iowa are slated to start on July 1 2026 and December 1 2026, respectively.

Medicaid Work Requirements Pose Challenges for Beneficiaries and Providers

• In Wisconsin, BadgerCare Plus enrollees renewing coverage will face the requirement starting March 2027, while new applicants must meet it on January 1 2027.

Milwaukee Journal-Sentinal

• The Kaiser Family Foundation reports that disabled Medicaid enrollees average $21,000 in annual spending per person.

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• The Center on Budget and Policy Priorities estimates that as many as 36 million Medicaid beneficiaries could be affected.

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• The Congressional Budget Office projects 5 million coverage losses; the Urban Institute puts the figure at 7 million.

The American Prospect

Exemptions in Wisconsin include pregnancy, disability, caregiving for a disabled person or a child under 14, American Indian or Alaska Native status, and veteran total-disability rating. State officials say eligibility will be verified at initial application or renewal, with documentation such as pay stubs or diagnosis codes used when existing data are insufficient.

Milwaukee Journal-Sentinal

CMS guidance allows states to permit “self-attestation” of medical frailty through 2027, though the option is not mandatory. The Wisconsin Department of Health Services has indicated that proof of work or exemption will be required only once per renewal period, typically within the past 12 months.

Milwaukee Journal-Sentinal

Estimates of potential coverage loss vary: CBPP cites 36 million, the CBO 5 million, and the Urban Institute 7 million. States also differ in interpreting “medically frail,” with some planning to use diagnosis codes and others awaiting further federal guidance. The public comment period on the CMS rule closes this week, but the final definition remains unsettled.

The American Prospect

Twenty-four states and two governors have filed a federal lawsuit challenging the “significant impairment” requirement; a district judge denied a preliminary injunction but set an expedited briefing schedule before the January 2027 deadline. Advocates urge beneficiaries to gather documentation of work, volunteer hours, or school enrollment now, update contact information with state Medicaid portals, and monitor state websites for guidance on exemption procedures.

The American Prospect