The Trump administration will give states an optional six-month grace period before they must enforce new Medicaid work requirements, pushing back the point at which millions of people could lose coverage under the rules.
The Centers for Medicare and Medicaid Services (CMS) announced on Friday an optional "hold harmless" period through June 30, 2027, to give states a transition period to modernise their eligibility systems, improve processes and streamline the applicant and beneficiary experience. The work requirements had been due to take effect on January 1, 2027.
During the six-month period, states will still assess whether Medicaid applicants and beneficiaries meet the work requirements or qualify for an exclusion. But otherwise eligible people will not lose coverage or be denied coverage solely because they fail to meet the requirement, CMS said.
The work requirements were established as part of last summer's sweeping domestic policy legislation, H.R. 1, known as the One Big Beautiful Bill Act. Under the law, most adults ages 19 to 64 covered through the Affordable Care Act's Medicaid expansion must work, do community service or take part in a work programme for at least 80 hours a month, attend school at least half time, or meet a specified monthly income threshold, unless an exemption applies.
CMS said the transition period would allow states time to improve eligibility systems, automate verification and train workers, and encouraged states to use existing data to automatically verify qualifying activities and exemptions before asking beneficiaries for additional information.
The delay comes as states and health advocacy organisations have sued the Department of Health and Human Services over the rules, arguing they will harm medically frail patients and saddle states and providers with additional documentation burdens. A federal judge in Boston ruled on October 29 that CMS had overstepped its authority by requiring seriously ill enrollees to prove their conditions significantly limit their ability to work in order to qualify for a medical exemption.
The changes to Medicaid under the law, including the work requirements and a more frequent six-month redetermination period, could lead to between 5 and 10 million fewer enrollments by 2028, according to an estimate by the Urban Institute. Some states, including Nebraska and Montana, have already begun implementing the work requirement early, and CMS did not immediately say whether the optional pause would apply to them.
