CMS sets national Medicaid work rules (Jun 2026)

Congress gave CMS the authority to require work rules nationally through Section 71119 of the One Big Beautiful Bill Act (H.R. 1), signed by President Trump on July 4, 2025. Before that law, federal statute prohibited linking Medicaid eligibility to employment. States could apply for waivers, and the first Trump administration approved 13 such waivers, but courts blocked enforcement in nearly every state. Judge James Boasberg vacated Arkansas and Kentucky's programs in 2019 under the , ruling that HHS had failed to consider how coverage losses would affect Medicaid's core purpose.

OBBBA changed the legal landscape completely. Section 71119 directly mandates states to impose the requirement, removing the waiver pathway and court challenge avenue that had succeeded in 2018 and 2019. The statute directed CMS to publish an implementing rule by June 1, 2026.

CMS issued CMS-2454-IFC on June 1, 2026, filing it at 4:45 PM and scheduling Federal Register publication for June 3, 2026. The rule runs 387 pages. It requires "applicable individuals" — non-pregnant adults aged 19 to 64 who are not enrolled in Medicare and who receive coverage through or equivalent waiver programs — to demonstrate 80 hours per month of qualifying activity. Qualifying activities include employment, education, work programs, community service, and combinations thereof. An individual can also satisfy the requirement by earning at least $580 per month (80 times the federal minimum wage in 2026).

New Medicaid applicants must meet the requirement for at least one month before the month of application. Existing enrollees must demonstrate compliance at each renewal, which now occurs at least every six months under a separate OBBBA provision.

The exemptions list is narrower than many states expected. CMS exempts pregnant and postpartum individuals, people with disabilities, the medically frail, American Indian and Alaska Native members, parents or caregivers of children under 13 or of people with disabilities, and individuals already meeting SNAP or TANF work requirements. CMS defined medical frailty using exactly five ICD-10-based criteria: blindness, substance use disorder, disabling mental disorder, physical or developmental or intellectual disability interfering with daily living, and serious or complex medical condition.

KFF reported on June 2, 2026 that the five-category frailty definition is more restrictive than most states anticipated in their early planning, and that it will push eligible people who don't fit those exact boxes toward losing coverage. CMS explicitly told states they can't add frailty categories of their own.

CMS's own projections inside the rule estimate that enrollment will drop by 2.3 million in fiscal year 2027 and by 3.1 to 3.3 million annually from fiscal year 2028 onward, based on a 15 percent enrollment decline among adult beneficiaries. CMS projects that roughly 12 percent of those subject to the requirement will lose coverage through noncompliance, and another 7 percent will lose coverage through administrative or procedural failures — meaning they may meet the requirement but can't document it in time.

The Congressional Budget Office's 2025 estimate put the ten-year coverage loss at 5.3 million people by 2034, with the work requirement provision alone responsible for $325.6 billion in reduced federal Medicaid spending. The Urban Institute estimated that between 4.9 and 10.1 million people could lose Medicaid coverage by 2028 when work requirements and the new six-month redetermination cycle are combined.

Arkansas is the most instructive precedent. From June 2018 through March 2019, Arkansas required adults aged 30 to 49 to report 80 hours of work monthly. More than 18,000 people lost coverage, about 25 percent of those subject to the requirement. A 2019 New England Journal of Medicine study found no measurable increase in employment. The uninsured rate among 30-to-49-year-olds in Arkansas rose from 10.5 percent in 2016 to 14.5 percent in 2018. Judge Boasberg struck down the program in March 2019 under the APA.

Researchers studying Arkansas found that most people who lost coverage were either already working, had a qualifying exemption, or were confused by the online-only reporting portal. Only 2 percent of those subject to the requirement actively fulfilled the monthly reporting. The same pattern, coverage losses driven by paperwork failure rather than lack of work, is what advocates predict will repeat under the new national rule.

CMS Administrator Dr. Mehmet Oz was confirmed by the Senate 53-45 on April 3, 2025, along strict party lines. Oz is a cardiothoracic surgeon and former television personality who was nominated by President Trump in November 2024. In his June 1, 2026 press statement, Oz said the rule "helps Americans build skills and independence through work, education, job training, or community service." He also announced that CMS's EMMY system, Eligibility Made Easy, would give states new data tools to verify Medicaid eligibility.

Oz also cited a June 2026 HHS Office of the Assistant Secretary for Planning and Evaluation brief projecting that the requirements could reduce poverty by 1.6 to 2.9 million people, depending on job availability. Independent health policy researchers at Cornell, surveyed by the Cornell Health Policy Center, found that 84 percent disagreed the requirements would substantially increase employment, and 61 percent said the CBO coverage loss estimate of 5.3 million was "about right."

States must begin outreach to affected enrollees between June 30 and August 31, 2026, through regular mail and at least one additional channel. States must verify compliance at application and at each renewal. CMS set a strict noncompliance process: if a state can't verify compliance, it must send a notice and give the individual 30 calendar days to demonstrate compliance before denying or disenrolling them.

Georgetown University's Center for Children and Families estimated in February 2026 that the $200 million in federal funds provided under OBBBA for implementation is far short of what states will actually need to modify their eligibility and enrollment systems. The rule was released seven months before the January 2027 implementation deadline.

Nebraska enforced the requirement first, starting May 1, 2026, using a state plan amendment rather than a . All 41 states that expanded Medicaid under the ACA are subject to the rule, as are Georgia and Wisconsin through their partial expansion waivers. The ten states that have not expanded Medicaid are exempt from the work requirement.

Human Rights Watch and Oxfam America urged CMS to broaden exemptions and reduce documentation burdens, citing evidence from Georgia's expansion work requirement, which launched in 2023, showing that administrative failures routinely caused eligible people to lose coverage. On June 1, 2026, six Democratic governors wrote to CMS Administrator Oz and Medicaid Director Brillman calling for a delay if the final rules differed from planning assumptions states had been working under.

Between 19 and 37 percent of people who already meet the work requirement will nonetheless lose Medicaid coverage due to documentation challenges, according to Urban Institute researchers. CMS's own rule projects a 7 percent administrative loss rate on top of the 12 percent noncompliance rate.

CMS issued the rule effective July 31, 2026, with the comment period closing the same day. Comments submitted through that date become part of the official administrative record and can inform future litigation or revision. CMS is not required to modify the rule before the January 2027 implementation date, but the administrative record shapes any future APA challenge.

CMS sets national Medicaid work rules affecting 18.5 million adults