Dr. Mehmet Oz, administrator of the federal Centers for Medicare and Medicaid Services, speaks at the Department of Health and Human Services in Washington, D.C., in December. Last month, CMS released guidance on how states should implement new Medicaid work requirements. (Photo: Alex Wong/Getty Images)
State Medicaid agencies fear many unwell and disabled people will lose coverage as the Trump administration narrows the definition of a “medically frail” person enough to gain exemptions from new work requirements.
Under the Tax and Spending Act signed by President Donald Trump a year ago, states that expanded Medicaid to cover more adults under the Affordable Care Act – 40 states plus the District of Columbia – must require those adults to work, attend school or volunteer at least 80 hours a month.
The so-called One Big Beautiful Bill Act exempts Medicaid beneficiaries who are “medically frail” or have a stern illness or disability. However, on June 1, the Trump administration released this information interim guidelines for enacting a law stating that to be considered “in poor health”, a person must have a significant health condition AND significantly impaired ability to work.
“This rule helps Americans build skills and independence through work, education, job training or community service, creating new opportunities for themselves and their families,” said Dr. Mehmet Oz, director of the federal Centers for Medicare and Medicaid Services, in statement earlier this month, announcing new guidelines.
But states operated under the assumption that they would exploit the federal government’s conventional designation of “medically frail,” which covers five distinct categories of disabilities and illnesses but does not require the Medicaid agency to determine whether a person can work.
States were already scrambling to set up systems to enforce the new work rules ahead of the January 2027 deadline, according to Jocelyn Guyer, managing director of Manatt Health, a consulting firm that advises state Medicaid agencies.
“Now, just a diagnosis is not enough. You may have to go to a doctor and get a special certificate,” Guyer said. “So this has turned a very simple protection for people with disabilities and people with serious health conditions into a morass of paperwork where they suddenly have to engage their health care professionals in documenting and assessing their ability to work.”
Earlier this week, 25 Democrat-led states and the District of Columbia defendant the Trump administration on the work requirement, based largely on revised “medical frailty” guidelines.
Several state Medicaid agencies said they couldn’t understand what they would have to do to meet the requirements. Even before the “medically weak” transition, states were hiring consultants and creating IT systems to verify and track the work status of registered people, something they had never had to do before.
“Most states have worked to identify a range of diagnoses that could meet this definition in hopes that it will be consistent with the final guidelines,” said Melanie Bush, deputy secretary of the North Carolina Division of Medicaid Health Services. “But the accumulation of impaired work ability – there isn’t necessarily a data source that is consistent with that.”
Bush said states are focusing on figuring out how to prevent eligible people from dropping off the lists simply because of paperwork and logistical challenges. One analysis estimates that the initial work requirements alone could cause five million people to lose coverage. State leaders and consultants fear that number could rise significantly with the new guidelines.
Health care workers are also concerned.
“This is not what we were trained to do. Most of us do not regularly assess disability or employability, and even if we feel comfortable in this role, we don’t have the time and we don’t get paid for it,” said Dr. Benjamin Sommers, a health economist at the Harvard TH Chan School of Public Health.
“Primary care providers in particular are already overworked and burnt out.”
Still, Medicaid directors have experience dealing with major changes to the program, says Michael Heifetz, managing director at consulting firm Alvarez & Marsal and a former director of Medicaid in Wisconsin. Heifetz said states regularly face major regulatory changes and tight schedules, and with greater access to advanced technology to support automate some tasks, he is confident they will be able to mitigate enrollment losses.
Another large support, he said, is that people enrolled in Medicaid will be able to “self-certify” their eligibility for waivers by 2027.
“States will work on this and again work with the advocacy community to minimize the impact on beneficiaries,” Heifetz said. “There is still some ambiguity in the provision on how self-assessment will function in 2027, as the provision states that other sources of information and documentation should continue to be sought, but that self-awareness will ultimately prevail.”
Jennifer Tolbert, a state health policy expert with the KFF research group, said states can exploit several data sources to determine a person’s ability to work, such as insurance claims, prescriptions or a person’s exploit of strong medical equipment.
However, she cautioned that using such data to make informed determinations would be a challenge, especially for people with substance exploit disorders and mental health issues.
To keep eligible people on the registry, California will exploit text message alerts, mailed notifications and electronic reminders to ensure recipients meet verification deadlines, according to Anthony Cava, a spokesman for the California Department of Health Care Services. Nevertheless, Cava said, the state is concerned that people, including those with stern illnesses and disabilities, will forgo admissions “solely because of paper barriers.”
Adela Flores-Brennan, Colorado’s director of Medicaid, said states could come under fire for making mistakes.
“We are also concerned about audits,” Flores-Brennan said. “There are new penalties for states, greater penalties for states due to error rates, and the level of complexity now being introduced into eligibility makes the environment error-prone because it is confusing and complex.”
Stateline reporter Shalina Chatlani can be reached at: schatlani@stateline.org
This story was originally produced by state linewhich is part of States Newsroom, a nonprofit news network that includes Pennsylvania Capital-Star, and is supported by grants and a coalition of donors as a 501c(3) public charity.
