The Trump administration's rollout of a federal mandate requiring millions of Medicaid recipients to work or risk losing health benefits is forcing states to scrap months of preparation, according to advocates and consultants. The regulations, issued June 1 by the Centers for Medicare & Medicaid Services (CMS), dictate detailed requirements for how states must verify work participation and handle exemptions.
Next year, President Donald Trump's One Big Beautiful Bill Act could require roughly 18.5 million adults across 42 states and the District of Columbia to prove they are working, in school, or performing community service to keep their Medicaid coverage, unless they qualify for an exemption. Much of the verification will rely on state computer systems, often built and run by private contractors under contracts worth hundreds of millions of dollars.
These systems have a history of errors that can cut off benefits to eligible people. States had already committed tens of millions of dollars to adjust their systems, but the new rules represent a "significant policy pivot" from what states expected, said Kinda Serafi, a partner at Manatt Health.
The rules tighten the "medical frailty" exemption, which allows people with health conditions to avoid work requirements. Under the new regulations, having a medical condition alone is not sufficient; states must assess the severity of the condition to determine if it prevents work.
Homelessness cannot be used as a reason for exemption. States like Nebraska, which launched its work requirement on May 1, now face immediate issues.
Nebraska had released a nearly 300-page list of qualifying medical conditions, including cancer, dementia, and HIV, and did not require proof of severity. Under the new rules, people must demonstrate that their illness impedes their ability to work.
"This is a recipe for disaster," said Rachel Klein of The Aids Institute. Medicaid enrollees in Nebraska are slated to start losing coverage this summer under the state's early rollout.
Sarah Maresh of Nebraska Appleseed urged the state to halt terminations until next year due to the needed changes. The new standards will limit self-attestation of medical frailty starting in 2028 and require documentation.
CMS Administrator Mehmet Oz said the mantra was "forgiving, but not foolish." The Congressional Budget Office estimates that 3 million enrollees will become uninsured by 2034 due to the work requirements, and experts warn the new regulations could push that number higher.