The Trump administration told states on Friday that they will not have to remove anyone from Medicaid for failing to meet new work requirements until July, giving state agencies six more months to get their systems ready.
The Centers for Medicare and Medicaid Services (CMS) said states will have an optional six-month “hold harmless” transition period running through June 30, 2027. During that window, no one who is otherwise eligible can lose coverage — or be denied coverage — solely because they failed to meet the work requirement.
The requirements themselves still technically take effect on January 1, 2027, and states must still begin checking whether enrollees are working, studying or volunteering. States that are ready may enforce the rules from January; states that are not ready will not face federal penalties until July. CMS asked states to request the flexibility in their mitigation plans by December 11.
Who the rules cover
Under the policy, many Medicaid beneficiaries must work or volunteer at least 80 hours a month, or be in school at least half-time. It applies only to adults covered under the Medicaid expansion that 40 states adopted, intended to extend health coverage to more lower-income adults without children at home.
There are exceptions for people over 64, those caring for children under 14, and people deemed too medically frail to work. The requirements were established by the One Big Beautiful Bill Act, the sweeping domestic policy law President Donald Trump signed last year.
Why states asked for more time
States have said they were not given enough time to set up the staffing, training and technology needed to police the new rules by January 1. CMS said states are making progress but still face implementation challenges.
“I think these extra six months are going to give states the ability to respond to the change, and there will be fewer people that lose their coverage due to administrative failures,” Kathy Hempstead, a senior policy officer for the Robert Wood Johnson Foundation, told The Associated Press.
Kate McEvoy, executive director of the National Association of Medicaid Directors, said state Medicaid leaders “appreciate the additional flexibility that CMS is providing.”
Pressure for a delay had been building. Senator Ron Wyden of Oregon and Representative Frank Pallone Jr. of New Jersey wrote to CMS Administrator Dr. Mehmet Oz this week asking him to use his discretion to give states more time, citing in part a recent Boston federal court decision that medically frail people should not be bound by the work requirement rules. The case, Massachusetts v. Oz, was brought by 25 states and the District of Columbia.
What happened where the rules started early
Nebraska launched its work requirements in May, the first state to do so. Preliminary data presented to the state’s Medicaid Advisory Committee showed that of the people subject to the requirement and due to have their benefits renewed in July and August, more than 9 in 10 qualified — but 533 people were denied continuing coverage, most of them over paperwork: they did not show that they were working or were exempt. Of those denied, 43 lost coverage because they did not meet the new requirement.
“There are likely people who are still eligible for coverage who lost it,” said Amy Behnke, chief executive of the Health Care Center Association of Nebraska.
Critics of the policy say most enrollees covered by the mandate are already working, and that people are more likely to lose coverage because of the paperwork needed to prove it than because they are not working.
What it means for people on Medicaid
For now, the delay is a reprieve, not a repeal. The work requirements remain the law, and enforcement arrives on July 1, 2027, whether states are ready or not. But for the next six months, no one in a state that takes the transition period can lose Medicaid coverage over the new rules — a window that may also give Congress time to consider changes. Democrats, who take control of both chambers in January after sweeping election victories last week, have said they want to roll back the requirements.
Sources: The Associated Press; NBC News; Axios; Nextgov/FCW; American Cancer Society Cancer Action Network.
