Making Sense of New Medicaid Rules
Last July, Congress passed the One Big Beautiful Bill Act (H.R.1), and the President signed the measure into law. The legislation was extensive and covered many government programs but included changes to Medicaid eligibility. While some new changes are relatively modest, the bill was passed to save money, which means covering fewer people and making fewer people eligible for the safety net Medicaid Program. The Administration just finalized the new rules for Medicaid work requirements, exemptions, and eligibility. Here is a quick summary of what patients and their families should know before the new rules take effect on January 1st, 2027.
What are the key changes to Medicaid Eligibility?
Starting January 1, 2027, adults between 19 and 64 that would like to participate in Medicaid (and are not Medicare eligible) must spend 80 hours per month participating in an approved “work requirement” activity or demonstrate that they qualify for an exemption. States have some latitude to determine if Medicaid beneficiaries are in compliance with new rules and how often they patients must verify they are in compliance, but anyone that cannot be proactively verified will be dropped from the program.
What counts as a “work requirement” activity starting January 2027?
Most crucially, working a job that pays below the poverty line threshold calculation for at least 80 hours per month meets the work requirement. However, other activities fulfill this requirement too, including:
- Being enrolled in an educational program at least half the time
- Participating in community service.
- You can also conduct a combination of community service, education, and work provided it adds up to the 80 hours per month threshold.
What qualifies as a Medicaid Work Requirement “exemption” starting January 2027?
Exemptions may seem comprehensive, but they are intended to be implemented narrowly. In general, current exemptions include:
- Being the caretaker for a dependent child under age 13, or for a disabled individual
- Being an inmate, a former foster care youth, or in a rehabilitation program.
- Being an expecting mother or a disabled veteran
- Having a short-term hardship, such as being in a disaster area or traveling extensively for a complex medical condition
- Being part of Indian Health Service or Temporary Assistance for Needy Family (TANF) Programs
- Having a “medically frail” designation
How does the “medically frail” designation work?
This exemption has been narrowed extensively under the new rule. Previously, simply having a diagnosis (such as HIV or cancer) was enough to qualify. Under the new requirements, beneficiaries must demonstrate significant functional impairment beyond the diagnosis itself. For example, someone would need to have a complex illness and be non-ambulatory to show their function is impaired and they cannot provide 80 hours of activity each month.
How Will Medicaid Work Requirements Be Enforced?
Beyond the concerns about making benefits less generous and accessible for the rare and chronic disease communities, patient advocates worry that the new system will overwhelm states as they now have to verify information. During the implementation process, Medicaid beneficiaries will be able to self-attest that they meet certain requirements or exemptions. Eventually, however, states will need to proactively verify this information – and work with the Centers for Medicare & Medicaid Services (CMS) – and potentially review medical records for indications of medical frailty. Additional information can be found here.
Can Advocacy Help Shape These Medicaid Rules?
As always, making your voice heard can affect positive change. If you are impacted by new rules moving forward, tell your members of Congress.
Remember: The House and Senate started the process to make these new rules, and they have the power to revisit the issue or initiate new legislation if the system isn’t working for their constituents.
Accessia Health is also actively engaged in this issue, advocating on behalf of the rare disease and chronic disease communities to ensure these changes don’t create unnecessary barriers to coverage for patients who need it most. Learn more about our policy efforts here.
Accessia Health is a national nonprofit dedicated to helping patients access the healthcare they need. If you have questions about how Medicaid eligibility changes may affect your coverage, our team can help you understand your options. Call us at 800-366-7741 or visit AccessiaHealth.org to learn more.
