On June 1, the Centers for Medicare & Medicaid Services (CMS) issued an Interim Final Rule with Comment (IFC) stating that some adult Medicaid applicants and enrollees must fulfill an 80-hour monthly work requirement as a condition for Medicaid eligibility. This requirement can be met through employment, education, work programs, or community service.

In a news release, CMS announced that the Working Families Tax Cut (WFTC) legislation sets standards for states to follow when implementing the statutory work requirement. This includes guidelines for eligibility determinations, exemptions, verification processes, and state reporting requirements.

The rule specifies which adults aged 19 to 64 must participate in work requirement activities. It also outlines exemptions for individuals who cannot meet the requirements due to health reasons or other qualifying conditions. These exemptions include, but are not limited to, pregnant women, postpartum individuals, the disabled, medically frail persons, American Indians or Alaska Natives, parents or caregivers of young children, people with disabilities, and those already meeting similar requirements through programs like SNAP or TANF.

The rule also includes state data reporting requirements and establishes how states must assess and verify compliance and how they must communicate the new requirement to Medicaid applicants and beneficiaries.

“This rule sets in motion one of the most harmful coverage rollbacks in the program’s history,” said Anthony Wright, executive director of the healthcare consumer advocacy group Families USA, in a statement.

“While reporting requirements have never been shown to encourage work, including in the failed experiments in Arkansas and Georgia, these new bureaucratic barriers will certainly cause millions of eligible and working Americans to be pushed off coverage because of paperwork,” Wright said.

“Far from protecting the vulnerable, this guidance significantly raises the barrier for demonstrating medical frailty, meaning many patients in the middle of treatment will have the new hassle of proving their condition, over and over, with any mistake or gap being penalized by the loss of their health care and coverage. Through this rule, CMS is requiring duplicative documentation and prohibiting states from taking full advantage of consumer-friendly tools like self-attestation.”

President and CEO Ann Greiner of the Primary Care Collaborative (PCC), a non-profit organization, also issued a statement: “The PCC is disappointed by today’s interim final rule, which would further imperil access to high-quality primary care. These top-down changes will force states to implement new requirements that will hamper access to preventive services and primary care.”

America’s Physician Groups (APG) expressed gratitude for several provisions but also concerns about other aspects of the rule. Members of APG care for millions of Medicaid beneficiaries, particularly under contracts and other arrangements with managed Medicaid plans, the organization stated.

APG stated that it was grateful that CMS proposed allowing people seeking to enroll in Medicaid to attest to the existence of their pregnancies or other factors warranting exclusion from the new work requirements. However, the organization stated it had numerous concerns about aspects of the proposed rule that will put individuals, their physicians, and states in next-to-impossible situations when determining compliance with the community engagement requirements.

“The proposed rule says, for instance, that having asthma, hypertension, generalized pain, Type 1 or II diabetes, and/or headaches, would not ‘significantly impair an individual’s ability’ to meet the community requirements, and that the acuity of a serious or complex condition may fluctuate such that it may no longer impair one’s ability to work,” APG noted.

“These statements suggest that individuals on Medicaid with chronic or serious conditions may be forced into a nearly endless cycle of doctors’ visits to determine how ill they really are and whether they can work; that states will similarly have to digest endless streams of such information about enrollees; and that states will also have substantial latitude to force enrollees off the program through subjective interpretations about their illnesses and their ability to work.”

Carl Schmid, the executive director of the HIV+Hepatitis Policy Institute, a non-profit organization, issued the following statement: "People living with HIV have a lifelong serious and complex medical condition and have special medical needs -- they cannot stay healthy without continuous access to lifesaving HIV treatment. Any gap will put them at risk of serious health consequences." 

In a news release, HIV+Hep stated that the organization has been urging the Trump administration to exempt people living with HIV and sent a letter to CMS Administrator Dr. Mehmet Oz, which was followed up with meetings at HHS, CMS, and OMB. Additionally, the organization sent a letter to all impacted state Medicaid Directors. Several states have responded positively that they would like to exempt people living with HIV pending the federal guidance, HIV+Hep noted.

CMS stated that it is supporting states in implementing the requirement through federal resources, technical assistance, and private-sector collaboration. This includes $200 million in Government Efficiency Grants authorized under the WFTC legislation to support state system modernization and administrative capacity, more than $600 million in committed support from private-sector technology vendors to help states update eligibility and enrollment systems, and support for outreach to Medicaid beneficiaries.

The work requirement must be enforced in relevant states by January 1, 2027, although some—like Nebraska—have already adopted it, and others are contemplating early adoption. This rule is issued with a comment period.