Medicaid Work Requirements Hit July 1 in Montana While 5.3 Million Face Coverage Loss Nationwide

Update, June 3, 2026: The Centers for Medicare & Medicaid Services issued final regulations on June 1 that Kinda Serafi, a partner at Manatt Health, described as a “significant policy pivot” from what states had expected. States that spent months building eligibility computer systems to handle exemptions will need to scrap that work less than seven months before enforcement begins, according to KFF Health News.

The regulations require states to assess “the severity of an individual’s condition” rather than its presence alone, and limit the medical frailty exemption to five categories with no state additions permitted. Nebraska, which launched its work requirement on May 1 and had already published a nearly 300-page list of qualifying conditions, must now revise how it evaluates enrollees while coverage terminations for current participants are already scheduled this summer.

Starting in 2028, CMS will end self-attestation for medical frailty claims and require documentation, a standard more than two dozen states had not planned for, according to KFF Health News. Daniel Meuse, deputy director of Princeton University’s State Health and Value Strategies program, said states “will have to undo work that they did” to align with the new federal rules.

Update, June 5, 2026: The Centers for Medicare and Medicaid Services released an interim final rule on Medicaid work requirements that tightens eligibility standards beyond the One Big Beautiful Bill’s statutory language. Enrollees with diagnosed conditions such as sickle cell disease must now demonstrate they are “greatly impaired” from working, eliminating the automatic medical frailty exemptions that Nebraska had preserved when it implemented requirements voluntarily eight months ahead of the federal deadline.

Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities, told Mother Jones that state officials were not informed of the new medical frailty definition during federal-state discussions. Wagner attributed the stricter standard to the White House and said states will not be able to implement the requirements accurately by the January 1, 2027 deadline for all Medicaid expansion states.

The Urban Institute projects between 4.9 million and 10.1 million fewer people enrolled in Medicaid by 2028, with the interim final rule likely pushing the outcome toward the high end of that range. Maria Town, president and CEO of the American Association of People with Disabilities, noted that Medicaid-supported employment for disabled people does not qualify as “community engagement” under the rule. A 60-day public comment period is open before the rule is finalized.

Update, June 12, 2026: The Centers for Medicare & Medicaid Services released final rules on June 1 establishing how states must verify Medicaid work requirements under the One Big Beautiful Bill Act. The rules cover roughly 18.5 million enrollees in the Medicaid expansion population, with most states required to begin enforcement by January 1, 2027, per KFF Health News.

Nebraska began enforcement in May. Montana will start in July but has set October as the date when it will begin terminating coverage. Arkansas will also launch in July but will not impose penalties until 2027.

Enrollees may self-attest to qualifying work hours or medical inability to work in 2027, but states will require documentation starting in 2028. The final rules leave the definition of “medically frail” to each state individually, a standard the National Organization for Rare Disorders said could produce different eligibility outcomes across state lines. States also face financial penalties for incorrectly granting exemptions, which KFF researcher Jennifer Tolbert said may cause states to terminate coverage for people who still qualify.

Update, July 7, 2026: Indiana released implementation details for Medicaid work requirements this week, announcing that Healthy Indiana Plan enrollees must log at least 80 hours of qualifying monthly activity beginning January 1, 2027. New applicants must demonstrate three consecutive months of compliance before that date, setting an effective start of October 2026 for that group.

Indiana’s HIP program currently covers roughly 487,000 residents, down from 671,000 when Gov. Mike Braun signed the work requirement law last April. FSSA Secretary Mitch Roob said the agency cannot project how many enrollees will fail to meet the threshold or secure an exemption, and it is still awaiting federal guidance on how to define the medically frail exemption category.

Estimates from the Urban Institute and Robert Wood Johnson Foundation project between 102,000 and 116,000 Hoosiers could lose HIP coverage under the 80-hour rule. Indiana’s rollout is required under the federal reconciliation legislation President Trump signed in 2025, which mandates work requirements across all Medicaid expansion programs. FSSA plans to hold town halls and webinars this summer to reach current enrollees, according to the Indiana Capital Chronicle.

Update, July 10, 2026: A KFF Health News report published today documents how the Medicaid work requirements create specific documentation barriers for more than one million farmworkers who are U.S. citizens or legal permanent residents. Alexis Guild, vice president of strategy and programs at Farmworker Justice, said seasonal employment and informal cash-paid jobs make it difficult for workers to prove the required 80 hours of monthly activity to Medicaid administrators.

Forty-three states and Washington, D.C., must implement the 80-hour rule by Jan. 1, 2027, under the One Big Beautiful Bill Act signed by President Donald Trump. The law also requires Medicaid beneficiaries to verify their eligibility at least twice per year, double the previous standard.

Akeiisa Coleman, an assistant vice president at the Commonwealth Fund, told KFF Health News that missed letters and unfiled forms could strip coverage from workers who meet the underlying eligibility criteria. A 2021-22 California survey cited in the report found that 47% of female farmworkers and 37% of male farmworkers in the state had at least one chronic health condition.

Update, July 12, 2026: Arkansas has begun a soft launch of Medicaid work requirements under the One Big Beautiful Bill Act, signed by President Trump, with the state verifying whether expansion enrollees meet the requirements before enforcement begins in January 2027. State officials estimate as many as 42,000 expansion enrollees could lose coverage once the requirements take effect.

The policy carries a documented track record in the state. Arkansas’ first attempt at work requirements resulted in 18,000 people losing coverage, and a 2019 New England Journal of Medicine study found no significant employment gains — more than 95% of people targeted by the policy already met the requirement or qualified for an exemption. A federal judge ultimately blocked that earlier effort.

Centene, one of two insurers administering Arkansas’ Medicaid expansion, announced plans to exit the program in January, leaving coverage arrangements unresolved for thousands of enrollees ahead of the enforcement deadline. Arkansas also leads the nation in the share of rural hospitals considered vulnerable to closure, according to the Arkansas Advocate, with labor and delivery services already disappearing from communities across the state.

Update, July 17, 2026: The Centers for Medicare & Medicaid Services approved a temporary hardship exemption from Medicaid work requirements for Dawson County, Nebraska, after Gov. Jim Pillen directed the state Department of Health and Human Services to seek the waiver. The Tyson Foods meatpacking plant in Lexington closed in January, eliminating roughly 3,000 jobs at the city’s largest employer after 35 years of operation.

Dawson County recorded a preliminary, non-seasonally adjusted unemployment rate of nearly 20% in April, the highest in Nebraska that month, clearing the federal threshold requiring either an 8% rate or a rate at least 1.5 times the national average. Nebraska residents who lived in Dawson County at any point since Feb. 1 are automatically exempt from work requirements until the county’s unemployment drops below that threshold, according to Nebraska DHHS.

Nebraska became the first state to enforce the new federal Medicaid work requirements on May 1, and all states must comply by Jan. 1, 2027. Nebraska DHHS estimates up to 29,000 of the 72,000 Nebraskans enrolled in Medicaid expansion are subject to the 80-hours-per-month work or community service requirement. (Source: Nebraska Examiner, reported by Cindy Gonzalez)

Update, July 20, 2026: Regulations finalized in June require Medicaid enrollees seeking an exemption from the new work mandate to obtain documentation from a clinician proving they are “medically frail,” a standard the Centers for Medicare and Medicaid Services confirmed without further elaboration on the record. The requirement, created by the One Big Beautiful Bill Act, takes effect Jan. 1, 2027, in most states and will affect an estimated 18.5 million Americans, according to KFF.

Physicians say they lack the occupational medicine training to assess whether a patient’s condition prevents work, and the American Medical Association warned CMS administrator Mehmet Oz in a May letter that the standard converts clinical appointments into “an eligibility gatekeeping process.” AMA president Willie Underwood III stated that patients who suspect their disclosures could affect coverage will stop communicating openly with their doctors. Twenty-five mostly Democratic-led states filed a lawsuit in late June arguing the medical frailty standard would be impossible for both enrollees and state agencies to meet.

Under the final rule, states may accept a patient’s self-attestation of medical frailty twice in 2027 and only once in 2028, after which clinician documentation becomes the primary route to an exemption. Brown University physician Rahul Vanjani noted that doctors already facing a nationwide primary care shortage are concerned about potential licensing consequences if they incorrectly certify a patient’s work capacity.