CMS Medicaid Work Requirements May Reshape Coverage for Millions by 2027

The CMS notified Medicaid beneficiaries, who met certain requirements, that they must report 80 hours of work per month as a new condition of eligibility to receive government assistance.¹

The notice, published on June 1, formally serves as an announcement for an amendment made to the Working Families Tax Cut Act (WFTC) of 2025, signed by President Donald J. Trump on July 4, 2025. The decision was based on research from the National Bureau of Economic Research, the Congressional Research Service, and other specific state-led studies that all concluded requirements assigned to the receipt of government assistance increased employment among beneficiaries.² Prior research has shown a decline in today’s employment and working hours among Americans when compared with the 1990s, and the studies have attributed this decline to an increase in government health benefits. The WFTC Act and CMS’s enforcement aim to incentivize employment or societal contributions among beneficiaries, as all states must comply with this mandate by January 1, 2027.^1,2

The requirement applies to non-pregnant adults between the ages of 19 and 64 who are not enrolled in Medicare and are eligible for Medicaid. Individuals who are disabled or medically frail, parents and caretakers of children under 14 years of age, people with disabilities, former foster care youth, Native Americans and Native Alaskans, and other specific individuals are exempt.¹

The 80 hours per month is not limited to employment; other qualifying activities include participation in certain work programs, community service, or at least part-time enrollment in an educational program. The activities can be combined to achieve the required 80 hours, or they can be met by reaching 80 times the federal hourly minimum wage ($580 per month).

Despite the projected benefits of implementation, key opinion leaders in the field contest the mandate.

“Community engagement requirements create a tangle of red tape that diverts resources away from patient care and worsens the administrative burden on physicians,” Jan K. Carney, MD, MPH, president of the American College of Physicians, said in a statement. “Instituting work requirements for the program could lead to millions of individuals losing health care coverage, putting at risk their health, financial security, and lives.”

Beneficiaries will be required to report their employment or proof of other qualifying activities to their state’s Medicaid program twice a year, potentially creating significant administrative barriers as beneficiaries learn to navigate the approval/submission process.³

Overall, Medicaid enrollment is declining, but the Congressional Budget Office reported that this mandate is likely to cause approximately 5.2 million adults not to renew their Medicaid benefits in addition to $324 billion in cuts.

For those who are able to navigate the process, the Office of the Assistant Secretary for Planning and Evaluation estimated the mandate could take anywhere from 1.6 to 2.9 million people out of poverty.²

But there is also research contradicting government projections that the mandate will actually improve unemployment among beneficiaries. A study assessing the benefits of the mandate in Arkansas in 2018 saw no change in employment after 3 months of noncompliance or nonsubmission of working hours. Within 6 months of implementing the provision, thousands of adults lost their insurance coverage.⁴

In contrast, a study conducted in Charlotte, North Carolina, observed an increase in employment among public housing residents from 58% to 88%. However, this mandate only required beneficiaries to report 15 hours per week, 20 hours less than the WFTC requirement.²

Both of these examples predate the WFTC Act of 2025, as the official bulletin, released in 2025, noted that multiple states submitted demonstration requests to implement a community engagement requirement.

The mandate has the potential to improve circumstances and employment rates for those able to comply with the requirements, while aiming to reduce long-term dependency on government assistance. However, many people, like independent contractors or those who work for small businesses, lose their insurance due to a paperwork burden.

Contradictory prior findings can’t affirm with certainty the impact this mandate will have on beneficiaries, leaving individuals questioning if they’ll be able to keep their insurance in 2027 or not.

References:

1. Medicaid community engagement requirement for certain individuals interim final rule with comment period (CMS-2454-IFC). CMS. June 1, 2026. Accessed June 2, 2026. https://www.cms.gov/newsroom/fact-sheets/medicaid-community-engagement-requirement-certain-individuals-interim-final-rule-comment-period-cms

2.Berman D, Burnszynksi J, GHertner R, et al. Medicaid work requirements incentivize employment and are estimated to reduce poverty. ASPE. June 1, 2026. Accessed June 2, 2026. https://aspe.hhs.gov/reports/medicaid-work-requirements-should-incentivize-employment-reduce-poverty

3. Bonavitacola J. Medicaid work requirements set to leave millions without insurance. AJMC^®. November 4, 2025. Accessed June 2, 2026. https://www.ajmc.com/view/medicaid-work-requirements-set-to-leave-millions-without-insurance

4. DiGrande S. Study finds no change in employment after implementation of Medicaid work requirements. AJMC. June 9, 2019. Accessed June 2, 2026. https://www.ajmc.com/view/study-finds-no-change-in-employment-after-implementation-of-medicaid-work-requirements

5. Section 71119 of the "Working Families Tax Cut" legislation, public law 119-21: requirements for states to establish Medicaid community engagement requirements for certain individuals. CMS. December 8, 2025. Accessed June 2, 2026. https://www.medicaid.gov/federal-policy-guidance/downloads/cib12082025.pdf