Medicaid Work Requirements: States Send Notices Before Jan. 1

States start contacting enrollees

State Medicaid agencies across the country are sending letters, texts and recorded phone calls to millions of low-income adults. The message is that their health coverage will soon depend on proving they work, study or volunteer. Starting Jan. 1, 2027, adults in Medicaid's expansion group in dozens of states will need to log at least 80 hours a month of qualifying activity or meet a minimum income test to stay enrolled.11 Nevada, North Carolina and Pennsylvania are among the states that have already put out guidance.11

Pennsylvania's campaign shows the scale of the work. Its Department of Human Services is writing to nearly 700,000 enrollees and following up by text and robocall. Officials have warned that people who neither meet the rules nor qualify for an exemption could lose coverage.13 Human services secretary Val Arkoosh put the burden on enrollees in plain terms: everyone needs to read their mail.13

The outreach is required. The federal rule says states must notify affected enrollees by regular mail plus at least one other channel, such as text, phone or a website.18 Notice is not the same as protection, though, and the early results from states that started first suggest the paperwork itself will decide who keeps coverage.

What the rules require

The requirement comes from the 2025 budget reconciliation law, the One Big Beautiful Bill Act. The Centers for Medicare & Medicaid Services issued an interim final rule on June 1, 2026.2124 It applies to non-pregnant adults ages 19 to 64 who are not on Medicare and who get coverage through the adult expansion group or through certain Section 1115 waivers.21 People can meet the 80 hours with paid work, community service, a work program or a mix of these. Half-time school enrollment also counts, as does monthly income of at least 80 times the federal minimum wage.21 In 2026 that income threshold is $580 a month.25

Verification is designed to happen in the background first. States must check records they already hold before asking anyone for proof, including wage and unemployment data, SNAP and TANF files, Medicaid claims and school enrollment.11 If the data can't confirm compliance, the state has to send a notice of noncompliance. The enrollee then has 30 days to respond, or coverage ends.11 CMS treats a notice as received five days after the date printed on it, and coverage continues during the 30-day window.18

The requirement arrives alongside two other changes. Expansion adults will have their eligibility redetermined every six months instead of every twelve, and retroactive coverage windows will shrink.23 New York, for example, tells residents that anyone who applies before Jan. 1 or renews before March 1 gets a final 12-month period before moving to six-month renewals.20

The exemption list is long. It covers people who are medically frail, pregnant or postpartum, and parents or caregivers of children 13 and under or of disabled people. It also covers veterans with a total disability rating, American Indians and Alaska Natives, former foster youth, people in addiction treatment and people who are incarcerated.21 Through the end of 2027, states can accept an enrollee's own account of a medical condition when records don't settle the question. From 2028, that self-report is limited to once per enrollment period.11 At least six states will demand medical-frailty documentation from the start: Arkansas, Idaho, Indiana, New Hampshire, North Carolina and Ohio.11

How many states are covered

Reports differ on how many states are affected, and the difference matters. Consumer explainers often say 40 states plus the District of Columbia, meaning the jurisdictions that expanded Medicaid.11 CMS's own count is 43 states plus D.C., because some waiver populations are also included.21 Georgia, Tennessee and Wisconsin never expanded Medicaid but cover some low-income adults through waivers, so those enrollees fall under the rule.11 One state-by-state tracker names 13 waiver populations in eight states, including groups in Hawaii, Massachusetts, New York, Oregon and Utah.18 The federal count is the more accurate one. People in non-expansion states should not assume they are exempt.

About 20 million of Medicaid's 82.4 million enrollees were in the expansion group in 2025.11 Estimates of coverage losses also vary. One widely cited Congressional Budget Office figure says the work requirement alone would leave about 5.3 million more people uninsured by 2034.12 Another consumer guide cites 4.8 million.28 Both numbers point the same way, and the gap probably reflects different scoring snapshots.

Early states show where people fall through

Nebraska, Montana and Arkansas moved ahead of the federal deadline, and their experience is the best evidence so far.23 Nebraska began enforcing in May for new applicants and in July for current enrollees. State reporting showed 46% of new applicants and 34% of renewing enrollees met the qualifying conditions.16 Those figures don't say how many of the rest were exempt and how many were simply dropped, but they show how many people the state's data could not clear automatically.

In Montana, about 71,000 people are subject to the rules. Its grace period ended Oct. 1, so enrollees there can now be disenrolled for failing to comply.1612 Enrollees have been confused. State officials told lawmakers they had rewritten the letters to make them clearer, and Democratic legislators' requests to extend the deadline were refused.19 Montana has been through something like this before. When pandemic-era protections ended in 2023, roughly 87,000 Montanans who were financially eligible lost coverage for technical reasons such as paperwork errors.16

That history supports a fairly firm conclusion. The work requirement is likely to remove more eligible people through administrative failure than ineligible people through non-work. A Utah disability lawyer told the Associated Press that many people who still qualify risk losing coverage because of the extra paperwork and the hoops involved.11 When automated checks fail, caseworkers have to resolve cases by hand, and analysts warn that the resulting backlogs could push even more people off the rolls.19

The courts have not stepped in. In June, 25 Democratic-led states and D.C. sued, arguing that the rule unlawfully narrowed exemptions for people with serious medical conditions. A federal judge denied a temporary block in July.1115

What enrollees should do

State guidance and federal rules agree on a short checklist:

• Update contact information. A letter sent to an old address or a text to a dead number can turn into a coverage gap. Pennsylvania points enrollees to its COMPASS portal and app.1314
• Open every notice. The 30-day response clock is the most important deadline in the system.18 Missouri gives 35 days.18
• Keep records together. Save pay stubs, volunteer-hour logs, school enrollment letters and job-training records. Pennsylvania says paid work must always be verified, even in 2027.13
• Raise exemptions early. People who may qualify as medically frail should ask a doctor about documentation now.13
• Watch for scams. The Federal Trade Commission notes that Medicaid never charges a fee to enroll or renew.13
• Reapply if dropped. States cannot restrict reapplication, and enrollees keep the right to a fair hearing.18

The wider squeeze on health costs

The Medicaid changes are taking effect while costs are rising for other kinds of coverage too, which leaves people losing Medicaid with fewer affordable options. Employers expect health benefit costs per employee to rise 8.2% in 2027, the biggest increase since 2003, according to a Mercer survey of more than 1,800 employers.1 Without planned cost-cutting, employers say their plans would cost 11% more. Roughly two-thirds of large employers expect to shift more of the premium onto workers.17 Marsh's chief actuary attributes about one percentage point of that growth to rising use of GLP-1 drugs.1 Aon's estimate is higher, at 9.5%.8 The maximum allowable out-of-pocket limit for 2027 rises to $12,000 for an individual, and that cap applies to job-based plans as well.8

This matters for the policy's stated goal. People who satisfy the work requirement by working low-wage or part-time jobs are unlikely to find affordable employer coverage, as premiums and deductibles climb fastest for exactly that group. That is an inference from the cost data, not a finding of the surveys, but the direction is clear.

Medicare Advantage shows the same pattern of costs moving from premiums to the point of care. The average 2027 premium falls from $14.37 to $12.00, according to CMS projections.39 Meanwhile, out-of-pocket maximums are rising by roughly 9% to 10%, and Part D deductibles are up about 30%.59 Humana is discontinuing plans that cover about 600,000 members. UnitedHealthcare, Aetna and Centene are pulling out of hundreds of counties.9 Brokers report cuts to dental benefits and Part B premium givebacks, along with higher specialist copays.2 Not all coverage is negative: one analysis notes that plans are getting a 2.48% payment increase for 2027, worth more than $13 billion.5 Even so, members are getting less while plans are paid more.

Across Medicaid, employer plans and Medicare Advantage, the 2027 coverage year moves cost and administrative burden onto individuals. For Medicaid expansion adults the stakes are highest, because a missed letter can mean losing coverage altogether rather than paying a higher bill.