A new federal work requirement for Medicaid takes effect January 1, 2027, requiring millions of adults in the program’s expansion group to document 80 hours a month of work, school or community service to keep their coverage. The Centers for Medicare & Medicaid Services issued the interim final rule on June 1, 2026, and the agency’s own projection is that between 3.1 million and 3.3 million people will lose Medicaid coverage each year once states begin enforcing it — a figure built on an assumption about compliance that outside researchers consider unusually optimistic, with the Congressional Budget Office’s earlier estimate for similar provisions running closer to 5.2 million.
What Counts Toward the 80-Hour Requirement
The rule applies to non-pregnant adults ages 19 to 64 who are not entitled to or enrolled in Medicare and who are covered through the Medicaid expansion group or certain related demonstrations — a population currently found in 43 states and the District of Columbia, according to the CMS fact sheet on the interim final rule. To satisfy the requirement for a given month, an applicable individual must work, complete community service or participate in a qualifying work program for at least 80 hours; enroll in an educational program at least half-time; combine those activities to reach 80 hours; or show monthly income of at least 80 times the federal minimum wage, which comes to $580 in 2026.
States get some flexibility in how they administer the requirement, including the option to verify compliance more often than at application and renewal, but every state covering this population must build the verification system. New Medicaid applicants generally have to show one prior month of compliance before enrolling, while existing beneficiaries must document compliance for one or more months between renewal cycles — a shift from Medicaid’s historical practice of continuous eligibility for most adults in the expansion group.
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Who Is Exempt, and What Happens When Verification Fails
The rule carves out broad exemptions for people pregnant or in a postpartum period, those considered disabled or medically frail, parents and caretakers of children 13 and under or of a disabled family member, veterans with a total disability rating, former foster youth, American Indians and Alaska Natives, and people already meeting separate SNAP or TANF work requirements. States also have the option to grant short-term hardship exceptions tied to inpatient medical care, a declared disaster in the person’s county, high local unemployment, or travel required for serious medical treatment.
The consequences fall on people the state cannot verify, not only on people who genuinely fail to meet the requirement. If a state’s records do not show that someone met the 80-hour threshold or qualifies for an exemption, the rule requires the state to send a noncompliance notice and give the person 30 calendar days to demonstrate either compliance or exempt status before the application can be denied or the person disenrolled. Anyone disenrolled for noncompliance may reapply immediately, at which point the same verification process starts over — meaning coverage loss under this rule can be as much a function of paperwork and state data systems as of someone’s actual work activity.
CMS’s 3.3 Million Figure Is the Optimistic End of the Range
CMS’s own projection that 3.1 million to 3.3 million people will lose coverage each year rests on the assumption that roughly a third of the population subject to the requirement will successfully document their qualifying activity or exemption — an assumption the underlying research literature treats as generous. The interim final rule’s Federal Register publication lays out that methodology alongside the rule’s exemptions and comment period, which runs in parallel with the rule already taking legal effect.
Independent estimates built on state-level experience with earlier work-requirement pilots put the number considerably higher. The Center on Budget and Policy Priorities’ state-by-state analysis projects that the broader package of Medicaid work requirements will put between 9.9 million and 14.9 million people at risk of losing coverage by 2034, drawing on the Congressional Budget Office’s own scoring of the underlying law, which found a similar national work-reporting provision would push roughly 5.2 million people off Medicaid even before accounting for people who become uninsured as a downstream result.
The gap between CMS’s 3.3 million and outside estimates running several times higher comes down almost entirely to how much states’ verification systems succeed at recognizing legitimate work activity and exemptions on the first try, rather than defaulting people into the 30-day notice-and-appeal cycle. Past state pilots, including Arkansas’s short-lived 2018 work requirement, saw large coverage losses concentrated among people who were actually working or exempt but could not navigate the reporting system in time — the same structural risk built into this federal version.
With roughly four months left before the January 1, 2027 deadline, the number that eventually shows up in enrollment data will say less about how many people are willing to work than about whether 43 states can build reporting systems that catch compliant beneficiaries before the 30-day clock runs out.
This article was researched and drafted with the assistance of artificial intelligence.
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