Millions face health coverage loss under new Medicaid work rules

A new study found that nearly 20 percent of eligible adults in Medicaid expansion states are in danger of not meeting the minimum work hours that will be required nationwide beginning January 1. Women, unmarried people, White individuals, and those with limited education all had a higher risk of losing their health coverage due to noncompliance with these new requirements.

Up to 10 million people may lose Medicaid coverage in the United States due in part to new work requirements and eligibility redeterminations under the One Big Beautiful Bill Act (OBBBA), which mandates a reduction of nearly $1 trillion in Medicaid spending over a decade. While the administrative burden associated with meeting and maintaining these work requirements is expected to be the primary driver of disenrollment, a new study led by researchers at Boston University School of Public Health (BUSPH) and the Arnold School of Public Health at the University of South Carolina (Arnold School) found that millions of Medicaid enrollees may lose their health coverage due to an inability to achieve the required work hours. 

Set to take effect nationwide on January 1, 2027, the new federal rules on Medicaid work reporting requirements mandate that adults enrolled in the Affordable Care Act's Medicaid expansion must show that they are working, volunteering, enrolled in school, and/or participating in job training for at least 80 hours per month, with certain groups exempt. But the new study found that nearly 20 percent of Medicaid-eligible adults living in states that expanded Medicaid are at risk of noncompliance because they are likely unable to fulfill the minimum required hours once the rules take effect. The findings were published in JAMA Health Forum. 

Certain groups were more at risk of noncompliance than others. Women had a 22 percent higher probability of having insufficient or inconsistent work hours than men, while married Medicaid enrollees had an 18 percent lower probability of noncompliance than unmarried enrollees. 

Despite misconceptions by Medicaid work requirement proponents that able-bodied Medicaid recipients do not work, the study showed that more than 66 percent of applicable Medicaid recipients are in the labor force and, among that group, over 85 percent were working over 35 hours on average. However, there are many challenges that working Medicaid recipients may experience that prevent them from completing 80 hours of work each month. Many Medicaid recipients hold low-wage positions in the retail, hospitality, food service, healthcare, and agriculture industries, which often provide inconsistent and unpredictable work hours and positions. These workers may also encounter challenges with reliable transportation to and from work, affordable and reliable child care, and unrecognized disabilities or chronic health conditions that make it difficult for them to complete job tasks week after week. 

These results show that the ideological narrative of Medicaid recipients just needing to pull themselves up by their bootstraps does not consider the precarious employment and other real-world barriers that often prevent them from maintaining stable work over time. These new work requirements are going to be tougher to fulfill for people with less education, part-time jobs or gig work, who have less control over their hours, and those who have substantial health concerns that may not rise to the level of a documentable disability."

Dr. Paul Shafer, study lead and corresponding author, associate professor of health law, policy & management at BUSPH and codirector of the Boston University Medicaid Policy Lab

Furthermore, he says, "ample evidence suggests supporting people through Medicaid actually helps them to have stable employment because their health is better managed. Without Medicaid coverage, it is unlikely they will be able to meet both basic and critical health needs."

For the study, the team utilized federal social and economic data to examine employment among non-elderly adults plausibly eligible for Medicaid in the 40 Medicaid expansion states and Washington, DC from 2023-2025. The researchers estimated the prevalence of adults being at risk of noncompliance by being near the 20-hour per week threshold or reporting variable hours (both +/- 5 hours) within the last week compared to their normal weekly hours. 

They found that 19.8 percent of eligible Medicaid recipients were in danger of not meeting the work requirements, with 13.6 percent near the minimum hours threshold and 7.6 percent having highly inconsistent work hours. There were substantial differences in both employment activity and prevalence of noncompliance across expansion states, spanning multiple regions. States such as Connecticut, Ohio, Arkansas, and Nevada had among the highest proportion of populations at-risk of noncompliance due to insufficient work hours, while Massachusetts, Wisconsin, Colorado, and Washington were among the states with highest proportions of at-risk populations due to variable work hours.

"Work and community engagement requirements assume Medicaid expansion eligible individuals have predictable schedules that translate into the same hours worked as scheduled," says study senior author Dr. David Anderson, assistant professor in the Department of Health Services Policy and Management at the Arnold School. "Our study shows that this is not the case. People who are trying to meet these requirements are at higher risk if they are limited to short look-back periods, and limited hardship exemptions."

Single mothers with high school-aged children may be among the most affected groups, says Dr. Shafer. 

"Parents are only exempt if their children have a recognized disability or are under the age of 14, so single moms with older children must meet and report these work requirements to remain eligible," he says.

In addition to differences based on education level, sex, and marital status, the researchers also observed racial/ethnic disparities in risk of noncompliance: eligible Black and Hispanic Medicaid recipients had a lower risk than eligible White recipients. Those with higher education levels also had a lower risk compared to individuals who held less than a high school diploma.

The researchers also point out that these findings may be conservative estimates, as several states are expected to determine Medicaid eligibility based on multiple months of preemptive compliance prior to enrollment.

"States must look back to the prior month for compliance before the Medicaid application is filed, but they can look back as far as three months," says study coauthor Dr. Timothy Callaghan, associate professor of health law, policy & management at BUSPH. "That means that, in some states, individuals must demonstrate work over several months to qualify for benefits. This will slow the access of newly employed individuals to Medicaid benefits in these states, and could lead to disparities in Medicaid access for those with inconsistent work."