Medicaid work rules took effect on 31 July 2026 with nine exempt groups and two very different loss estimates

The two numbers most often quoted about Medicaid work requirements are not measuring the same thing, and the exemption list that determines who is actually exposed runs to nine categories.

The requirement comes from H.R. 1, the budget reconciliation law signed on 4 July 2025. The Centers for Medicare and Medicaid Services issued guidance on 8 December 2025 and then an interim final rule with comment period, published in the Federal Register on 3 June 2026 under the title Medicaid Program; Community Engagement Requirement for Certain Individuals. The rule states that the regulations are effective on 31 July 2026 and that states must implement the new requirement no later than 1 January 2027. The Center for Health Care Strategies records that extensions are available to states until 31 December 2028, and that Nebraska began first, on 1 May 2026.

The test itself is set out in the rule. An applicable individual demonstrates community engagement by working not less than 80 hours a month, completing not less than 80 hours of community service, participating in a work programme for not less than 80 hours, enrolling in an educational programme at least half time, combining those activities to reach 80 hours, or having monthly income of at least the federal minimum wage multiplied by 80 hours. At the federal minimum wage of 7.25 US dollars, that is about 580 US dollars a month.

Nine groups are specified as excluded individuals: former foster youth under 26, American Indian and Alaska Native people eligible for Indian Health Service care, carers of children aged 13 and under or of disabled people, veterans with a total disability rating, the medically frail, people already meeting TANF or SNAP work requirements, people in qualifying substance use disorder treatment, incarcerated people, and pregnant and postpartum people. Others are outside the requirement entirely, including people under 19 and those enrolled in Medicare Part A or B.

Being in a category is not the same as being exempt in practice. KFF's analysis of the interim final rule notes that the medical frailty exemption covers five groups, including people who are blind or disabled, people with disabilities limiting activities of daily living, people with substance use disorders, people with disabling mental disorders and people with serious or complex conditions, but that states must also determine whether the condition impairs the person's ability to work. States must first check 12 months of claims and encounter data; self attestation is permitted through 2027 and then limited to once per enrolment period from 1 January 2028; and diagnosis alone cannot establish frailty. KFF reports that the rule itself acknowledges states will struggle to identify medically frail people from claims data, particularly new applicants and those with behavioural health conditions.

The headline projections diverge because they count different populations over different periods. KFF, summarising the Congressional Budget Office, reports that about 5.2 million adults will lose federal Medicaid coverage because of work requirements by 2034 and that 4.8 million more people will be uninsured in that year, with federal spending reduced by about 326 billion US dollars over ten years. A later KFF brief describes the same CBO work as producing 5.3 million additional uninsured over ten years, a difference in framing rather than in the underlying estimate.

The Urban Institute, in work published by the Robert Wood Johnson Foundation, projects 4.9 to 10.1 million people losing Medicaid coverage in 2028. That range includes 3 to 7 million from work requirements and a further 2 to 3.1 million from the law's six monthly eligibility redeterminations, modelled across high, medium and low state mitigation scenarios. The analysis finds that 19 to 37 per cent of people who are currently employed would still lose coverage, largely through documentation failures rather than failure to work, and flags students, carers of disabled relatives, people aged 50 and over, self employed workers and people with irregular hours as at risk despite qualifying.

Administration and state readiness is the open question. KFF's tracker puts 44 states including the District of Columbia in scope, and reports that as of June 2026 CMS had identified affected enrollees in waiver programmes in eight states. Its survey of 42 state Medicaid programmes found states expecting to make systems and policy decisions before federal guidance arrived, with 200 million US dollars of federal implementation funding available. Outreach notices are due between 30 June and 31 August 2026.

What is not yet known is how many people in the nine excluded categories will be identified automatically by their state, and how many will have to prove it.