Advocates Say New Medicaid Work Rules Will Burden States, Jeopardize Coverage

Pietje Kobus-McAllister, Healthcare Innovation, 07/15/26

In a recent press call, the healthcare advocacy group Families USA provided a status update on the healthcare cuts enacted in H.R. 1 and the law’s impact. H.R. 1’s passage last year by Congressional Republicans and the Trump administration marked the largest cuts to Medicaid in history.

During the call, policy experts from Families USA and the Montana Budget and Policy Center discussed Montana’s strategy for Medicaid work reporting requirements.

H.R. 1 enacted the biggest rollback to healthcare coverage in history, said Families USA’s executive director, Anthony Wright. “While many of these cuts were timed for after this year's election, Americans are already starting to see the impacts.”

Families USA’s senior advisor on Medicaid Policy, Mary-Beth Malcarney, noted that over the past 12 months, the Medicaid team observed states grappling with the passage of H.R. 1 and the implementation of new Medicaid eligibility systems, all while navigating Medicaid funding cuts. “CMS’ approach now, in its new guidance and rulemaking coming out, is one of further limiting states' choices to run their Medicaid programs.” “The first and the biggest one is work reporting requirements,” Malcarney added.

Malcarney went on to explain that for months, states have been under the impression that they would have some flexibility in implementing the requirements, using electronic databases to streamline the process and allow eligible individuals to self-report their status. However, Malcarney said, the new ruling eliminates much of that flexibility for states and adds complex processes. The rule effectively bans people from self-reporting their medical circumstances after 2027, she said. This makes it much harder for states to determine who is eligible, especially for the most vulnerable citizens.

Medicaid covers one in five Montanans, said Heather O'Loughlin, executive director at the Montana Budget and Policy Center. The state of Montana has decided to move forward with implementing the community engagement requirements six months earlier than required under H.R. 1, she remarked. “I think that the reality is that we anticipate a lot of folks will ultimately lose coverage again, not because they are not working or not in compliance, but because they simply can't get through the systems the state has.” The state has said it anticipates a loss of coverage of roughly 15,000 individuals by 2027. However, O’Loughlin added, “We anticipate that loss of coverage will be much greater than that, given some of these additional requirements by CMS and additional burdens on enrollees.”

In a blog post, Anthony Wright wrote that “Congressional Republicans insisted throughout the H.R. 1 debate that the bill would not kick eligible enrollees off their health coverage, and that they would especially take measures to not harm vulnerable people — or as Speaker Mike Johnson said, that millions of Medicaid enrollees would not lose their coverage unless they ‘choose to do so.’” 

“Beginning January 1, 2027, adults enrolled in Medicaid expansion must document at least 80 hours per month of employment or qualifying activities — or prove they meet an exemption. While more than 90 percent of adults on Medicaid are already working or would qualify for an exemption, the new requirements set a paperwork trap,” Wright explained. “The issue is less whether they are working, but rather can they navigate a bureaucratic system designed to be difficult.”

Wright cited the Urban Institute, which projected that between 4.9 and 10.1 million people could lose Medicaid coverage by 2028 due to bureaucratic barriers.