A Closer Look at the Medicaid Work Requirement Provisions in the “Big Beautiful Bill”

On May 22, the House passed a budget reconciliation bill that includes significant changes to the Medicaid program. The Congressional Budget Office (CBO) estimates the Medicaid work requirement provisions in the House bill would be the largest source of Medicaid savings, reducing federal spending by $344 billion over ten years, and would increase the number of people without health insurance by 4.8 million. On June 16, the Senate Finance committee released proposed reconciliation language with some substantive changes to the Medicaid work requirement provisions, but this language may change as the Senate debates the bill.

Implementing work requirements on a national scale would require states to verify individuals’ monthly work status (at least every 6 months) and implement a long list of exemptions—policies that proved challenging for Arkansas and Georgia to operationalize and led to 18,000 people losing coverage in Arkansas, without increasing employment. KFF analysis shows most Medicaid adults under age 65 are working already (without a requirement) or face barriers to work. Many Medicaid adults who are working low-wage jobs are employed by small firms and in industries that have low employer-sponsored insurance offer rates.

The House-passed bill and the Senate proposal would require states to condition Medicaid eligibility for adults in the Affordable Care Act (ACA) Medicaid expansion group at application and following enrollment on meeting work requirements starting December 31, 2026, with the option for states to implement requirements earlier. Currently, 41 states (including DC) have expanded their Medicaid programs under the ACA to nearly all adults up to 138% FPL ($21,597 for an individual in 2025). As of June 2024, over 20 million people were enrolled through Medicaid expansion, representing nearly a quarter of total Medicaid enrollment across all states and 31% of total enrollment in expansion states. The Medicaid expansion population includes adults without dependents as well as many parents and people with disabilities or chronic conditions who do not receive SSI.

Key takeaways include:

• CBO estimates. Of the Medicaid provisions included in the House bill, CBO estimates implementing work requirements would account for the largest share of federal Medicaid savings and cause the largest increase in the number of people without health insurance.
• Verification requirements. The House bill would require states to verify at application and at renewal that individuals in the ACA expansion group meet work requirements (80 hours of work activities per month) or exemption criteria. States could also require verification more frequently.
• Implementation timeline. The House bill requires HHS to release additional guidance by the end of 2025, leaving states with limited time to develop or change implementation plans, protocols, and systems (and to test systems changes) before the December 2026 work requirement implementation deadline.
• State implementation choices. State choices to impose more stringent requirements than the minimum federal requirements outlined in the bill (e.g., requiring more frequent verification or imposing longer “look-back” periods when verifying coverage) as well as state effectiveness in using existing data to automate verification processes, will affect the number of individuals at risk of losing coverage.
• Comparison to other waivers and proposals. The Medicaid work requirement policies included in the bill are more stringent than previous policies considered by Congress and work requirements implemented under state Medicaid demonstration waivers; for example, the House bill makes it harder to gain coverage and to re-enroll and does not exempt older adults from requirements.

Key changes in the language released by the Senate Finance committee include altering exemptions, providing clarification on the timeframe to verify compliance, and introducing an option to delay implementation (at the discretion of the HHS Secretary) if certain conditions are met (these changes are referenced in the sections that follow). Unless otherwise noted, this issue brief provides an overview of the work requirement provisions in the House bill.

What does CBO say?

Of the Medicaid provisions included in the House bill, CBO estimates implementing work requirements would account for the largest share of federal Medicaid savings and cause the largest increase in the number of people without health insurance. CBO has not yet scored the proposed Senate changes; the following estimates reflect CBO’s analysis of the work requirement provisions included in the House bill. Over ten years, work requirements are estimated to reduce federal Medicaid spending by $344 billion, representing the largest share of the estimated $793 billion in total Medicaid cuts included in the bill (Figure 1). (CBO also projects indirect effects from the work requirement provision would decrease federal revenues by $8.4 billion over a decade.) The savings would largely stem from coverage losses. CBO expects 18.5 million people would be subject to the requirements each year and by 2034 federal Medicaid coverage would decrease by an estimated 5.2 million adults. CBO expects few of those disenrolled to have access to employment-based coverage and that no one would be eligible for Marketplace premium tax credits (as the bill makes those losing or denied Medicaid coverage due to work requirements ineligible for premium tax credits to purchase coverage through the ACA Marketplaces). CBO estimates national work requirements would ultimately increase the number of people without health insurance by 4.8 million in 2034.

What does the House bill require?

Expansion adults would be required to complete 80 hours of work or community service activities per month or meet exemption criteria to enroll in and maintain coverage (Figure 2). Individuals applying for coverage and those enrolled in coverage would need to work or engage in specified “qualifying activities” for at least 80 hours per month. States would be required to verify qualifying activities or exemptions in (at least) the month before application and (at least) one month between eligibility redeterminations (see Figure 3 and additional discussion below). The House bill specifies mandatory exemptions including all parents and caretakers (the proposed Senate language limits the parent/caretaker exemption to parents with children ages 14 and under), individuals who are “medically frail,” and individuals who are pregnant or postpartum, among others (Figure 2). The “medically frail” designation includes individuals who are blind or disabled, individuals with physical, intellectual, or developmental disabilities, individuals with substance use disorder or a “disabling” mental disorder, and those with “serious or complex” medical conditions. States may allow short-term hardship exceptions from work requirements, if requested by enrollees (or applicants) experiencing certain extenuating circumstances (Figure 2).
At a minimum, states would be required to verify individuals’ work or exemption status when individuals apply for coverage and at eligibility renewal (Figure 3). At application, states would be required to “look back” one or more consecutive months (immediately preceding the application month) to confirm compliance with the requirements. (The proposed Senate language caps the “look-back” at application to three months.) Every six months when eligibility is redetermined (or more frequently as determined by states), states would be required to “look back” one or more months (consecutive or non-consecutive) to verify compliance. In effect, states could require individuals to comply with work requirements for multiple months before they can enroll in coverage or for multiple months within any six-month eligibility period (or more frequently than every six months). The House bill directs states to use available information (e.g., payroll data) “where possible” to verify compliance with work activities, without requiring additional documentation from individuals. There is no requirement that states use available information to automate the verification of exemptions.

When a state is unable to verify compliance with the requirements or that an individual meets exemption criteria, it must issue a “notice of noncompliance” and deny the application or disenroll the individual from coverage if the individual is unable to show compliance (Figure 3). Individuals would have 30 days to show compliance (coverage would be maintained during this period if already enrolled). After 30 days, if an individual is unable to demonstrate compliance with the requirements or show they are exempt, the state would be required to deny the application or disenroll the individual from coverage (no later than the end of the month following the 30-day period). States would be required to follow standard Medicaid termination processes, including determining whether an individual qualifies for Medicaid coverage on another basis and provide written notice and opportunity for a fair hearing. To regain Medicaid coverage, individuals would need to reapply (triggering another compliance check at application). Individuals would also be barred from receiving subsidized Marketplace coverage, as the bill makes those losing (or denied) Medicaid coverage due to work requirements ineligible for premium tax credits to purchase coverage through the ACA Marketplaces.

What is the timeline for implementation?

The House bill specifies key work requirement implementation and compliance dates (Figure 4). The House bill directs the Secretary of HHS to issue implementation guidance by December 31, 2025. States would be required to condition Medicaid expansion eligibility and coverage on meeting work requirements by December 31, 2026, with an option to implement requirements sooner. States must begin outreach to notify individuals of the new requirements at least three months before the start of the first compliance “look-back” period and notify individuals “periodically thereafter.” (The proposed Senate language would introduce a new option for states experiencing challenges in implementing requirements / meeting the December 2026 deadline to potentially delay implementation until no later than December 31, 2028 (at the Secretary’s discretion).)

Forthcoming HHS guidance may identify implementation parameters and additional state requirements; however, if the guidance is slated to be released at the end of 2025, states will have limited time to develop or change implementation plans, protocols, and systems (and to test systems changes). The work requirement provisions outlined in the bill raise many operational and implementation questions (Appendix Table 1). The House bill includes references to areas where additional HHS guidance may further define standards and processes for states (Table 1). Implementing work requirements will involve complex systems changes (e.g., developing or adapting eligibility and enrollment systems), enrollee outreach and education, staff training, and coordination with managed care plans, providers, and other stakeholders. While the House bill allows states flexibility to impose more stringent requirements than the minimum requirements specified and allows states to implement requirements sooner than December 2026, the bill does not allow states flexibility to waive or ease the requirements or to delay implementation. (However, as discussed above, the proposed Senate language would introduce an option for states to delay implementation.)

How could implementation vary across states?

States would have flexibility to impose more stringent requirements than the minimum federal requirements outlined in the House bill. For example, states would have flexibility to determine how many months to “look back” at application (the proposed Senate language specifies a maximum three-month look back) and redetermination to verify compliance (and whether to verify compliance more frequently than at redetermination). In effect, states could choose to require compliance with work requirements for multiple months prior to the application month and for every month following enrollment (Box 1).