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.

Update, July 22, 2026: Nevada health officials confirmed the state will implement Medicaid work requirements on Jan. 1, 2027, affecting an estimated 280,000 residents who gained coverage through the ACA expansion. Enrollees between ages 19 and 64 must verify 80 hours per month of work, schooling, or volunteering, and will face six-month instead of annual renewals, according to the Nevada Health Authority.

Nevada joined 24 other states and the District of Columbia in suing the Trump administration this month over federal interim guidelines published June 1 that narrowed the “medically frail” exemption. The Nevada Health Authority, led by administrator Ann Jensen, finalized its own definition, limiting the exemption to people with one of five qualifying conditions who are also impaired in their ability to work as a result.

About 5,000 legally present immigrants in Nevada will lose Medicaid coverage starting Oct. 1, 2026, regardless of whether they meet work requirements. The state plans to notify all 280,000 affected expansion enrollees by Sept. 1 via email, text, and mailed letter, with documentation requirements set to begin in 2028.

Update, July 24, 2026: Idaho will enforce Medicaid work requirements starting Jan. 1, 2027, the Idaho Department of Health and Welfare announced this week. The state’s approximately 85,000 Medicaid expansion enrollees must document at least 80 hours per month of qualifying activities to keep their coverage.

Idaho adopted a three-month lookback period, requiring applicants to prove work history for the three months before applying for Medicaid. KFF, a nonpartisan health policy research organization, found that only Idaho, Indiana, and North Carolina plan to use a lookback period of that length, the maximum allowed under the One Big Beautiful Bill Act.

Idaho Medicaid Administrator Sasha O’Connell said a state review found 68,400 of roughly 83,000 current enrollees already met the new requirements. A separate analysis by the Urban Institute and the Robert Wood Johnson Foundation projects that work requirements and other changes in the federal law could remove 20,000 to 34,000 Idahoans from Medicaid expansion by 2028.

Update, July 28, 2026: Idaho will not offer the one-year grace period the federal government allowed states to give Medicaid enrollees who claim the “medically frail” exemption without documentation, Idaho Medicaid Administrator Sasha O’Connell told the Idaho Capital Sun. After an initial attestation, the Idaho Department of Health and Welfare will require a provider note or supporting claims data if its system does not already show evidence of a qualifying condition. An analysis by the Urban Institute and the Robert Wood Johnson Foundation projects that work requirements and other changes under the One Big Beautiful Bill Act could remove between 20,000 and 34,000 Idahoans from Medicaid expansion by 2028.

In Georgia, advocates are pressing the state to add HIV to its list of conditions that automatically qualify Medicaid enrollees as medically frail. The Georgia Department of Community Health released its proposed rule in July, omitting HIV from the automatic-exemption list despite federal guidance from the Centers for Medicare and Medicaid Services that cited HIV/AIDS as an example condition states could include. The DCH board will review public comments and consider changes at its Aug. 13 meeting, according to the Georgia Recorder.

The conflicts in both states follow June guidance from CMS narrowing the medically frail standard to require a significant health condition and a significant impairment in the ability to work. Twenty-five Democratic-led states filed suit against the Trump administration over that interpretation, arguing it may exclude many sick and disabled people from coverage.

Update, July 31, 2026: A federal judge denied 25 Democratic-led states’ request to pause Medicaid work requirements, leaving the Jan. 1, 2027 implementation deadline in place. U.S. District Judge Richard Stearns of Massachusetts ruled that the states failed to show sufficient harm, noting that CMS will reimburse 90% of states’ costs to design and execute the requirements.

The coalition, which includes the governors of Kentucky and Pennsylvania, sued CMS and HHS on June 29 over federal guidance that narrows the definition of “medically frail” — the designation exempting recipients with serious disabilities from the 80-hour monthly work requirement. Stearns acknowledged the case raises questions about CMS Administrator Dr. Mehmet Oz’s “faithfulness to Congressional intent,” per Stateline.

Nebraska, the first state to launch requirements ahead of schedule, reported 317 initial Medicaid applications and 65 renewal applications denied as of July 19, according to state DHHS spokesperson Jeff Powell. At a forum hosted by Nebraska Appleseed, health advocates reported 90-minute phone wait times and said the state’s Spanish-language help line was offline for more than six weeks between May and July.

Update, August 6, 2026: The Centers for Medicare & Medicaid Services confirmed on August 6 that homelessness does not qualify as an automatic exemption from federal Medicaid work requirements, overriding proposals from at least four states, including Montana, Arizona, Kentucky, and Utah, that had sought to include it. CMS, led by Mehmet Oz, told states they must adhere strictly to the federal exemption list, which covers people with disabilities, those over 64, pregnant people, and Native Americans, according to KFF Health News.

Montana plans to begin disenrolling Medicaid recipients in October if they cannot prove compliance, but the state’s automated system for checking medical records to identify eligible exemptions is not yet operational. Health department spokesperson Jon Ebelt said the system should be in place by October, and anyone not automatically exempted would have 30 days to submit documentation.

In June, 25 mostly Democratic-led states sued the Trump administration over the regulations, arguing the medical frailty standard is too difficult for enrollees to meet and for states to administer. Montana, Arkansas, and Nebraska are currently the only states implementing the requirements ahead of the January deadline that applies to all states.

Update, August 9, 2026: Indiana’s Family and Social Services Administration announced it is rolling out outreach tools ahead of Medicaid work requirements set to take effect January 1, 2027. The requirements apply to adults enrolled in the Healthy Indiana Plan, the state’s Medicaid expansion program, and mandate at least 80 hours per month of qualifying activity such as work or job training. Anyone applying on or after January 1 must demonstrate compliance going back to October 2026, per the Indiana Capital Chronicle.

The state began texting HIP members information about the requirements on July 21 from the phone number 43816. FSSA also launched an anonymous online screening tool that allows members to submit health and income information to determine whether they would be subject to the requirements or qualify for an exemption.

FSSA, in partnership with Covering Kids & Families, will hold public town halls for members and providers. The first is scheduled for August 17 at Ivy Tech’s Elkhart Community Center in Goshen, Indiana, and the second for September 1 at Ivy Tech Fort Wayne Auditorium in Fort Wayne. Additional town halls will be announced later in the year.