Medicaid Work Requirements Repeat the Arkansas Coverage Drop

Medicaid work requirements of 80 hours a month hit expansion adults nationwide by January 1, 2027. The Centers for Medicare & Medicaid Services issued the rule on June 1, 2026, carrying out Public Law 119-21, which CMS calls the Working Families Tax Cut.

Nebraska already started on May 1, 2026. Arkansas ran the same hour count in 2018 and cut 18,164 people from the rolls, with no rise in work. The worry from patients and caregivers is real. The older test says the drop comes when people do not send the form back.

The January Deadline for Expansion Adults

The rule covers non-pregnant adults ages 19 to 64 who are not on Medicare and who get Medicaid through the Affordable Care Act expansion group, or through certain section 1115 waivers. CMS says 43 states and the District of Columbia cover those groups. Georgia, Tennessee, and Wisconsin are in the mix through waiver programs even though they did not take the full expansion.

Adults who must comply have to show 80 hours per month of qualifying activities, or earn at least $580 in a month, which is 80 times the federal minimum wage in 2026. School at least half time also counts. Hours can be mixed across jobs, volunteer work, and work programs. New applicants generally need a qualifying month before they apply. People already on the program are checked at renewal, and states may check more often.

This rule helps Americans build skills and independence through work, education, job training, or community service, creating new opportunities for themselves and their families.

Mehmet Oz, CMS Administrator, June 1, 2026 CMS press release

If a state cannot confirm the hours, it must send a notice and give the person 30 calendar days to show compliance or an exemption. Miss that window and the application can be denied or the coverage closed. There is no lockout year. A person who is dropped may reapply at any time and is checked again.

CMS is putting $200 million in Government Efficiency Grants toward state systems, plus more than $600 million in pledged help from technology vendors. An HHS Assistant Secretary for Planning and Evaluation study cited in the same CMS release says the requirements could cut poverty by as much as 2.9 million people, depending on job availability. That is the administration’s case. The last time a state ran this hour test, employment did not move.

THE IMPLEMENTATION CLOCK

1. July 4, 2025: President Trump signs Public Law 119-21, which writes the work test into Medicaid statute.
2. May 1, 2026: Nebraska becomes the first state to enforce the federal requirement.
3. June 1, 2026: CMS issues the interim final rule that states must follow.
4. January 1, 2027: Applicable states must have the requirement in force, unless they win a good-faith delay.
5. January 2028: States generally must collect documents when they lack data on file, ending the first-year honor system.
6. December 31, 2028: The last date a good-faith delay may run.

Montana started on July 1, 2026, but plans to hold coverage losses for current enrollees until January 1, 2027. Iowa has said it will start on December 1, 2026. Arkansas scheduled a soft launch with no penalties until the national date. The Secretary of Health and Human Services may push a state’s deadline, but CMS has said those delays are for extraordinary problems, not ordinary unreadiness.

Arkansas Lost 18,164 People Without Raising Employment

Arkansas was the first state to try an 80-hour Medicaid work test, starting in June 2018 for adults ages 30 to 49 in its expansion program. Enrollees had to log work or other qualifying hours and report by the fifth of the next month, at first through an online portal. A federal judge halted the policy in April 2019. By then the pattern was already on paper.

KFF’s tally of Arkansas Department of Human Services figures found 18,164 people lost coverage in 2018 for failing the work and reporting rules. Only 1,910 of them had reapplied and regained coverage in early 2019. Harvard researchers found that nearly 97 percent of Arkansas adults ages 30 to 49 who were eligible for Medicaid were already working or should have been exempt. The target was not a large idle group. It was a reporting system laid on people who already had jobs, care duties, or health limits.

ARKANSAS 2018 RESULTS

• Coverage cut: 18,164 people lost Medicaid in 2018 for failing the work and reporting rules.
• Jobs: A 2020 follow-up survey of 2,706 low-income adults found no employment gain over 18 months, and the employment rate among ages 30 to 49 slipped from about 42 percent to just below 39 percent.
• Uninsured rate: Among Arkansans ages 30 to 49 eligible for Medicaid, the uninsured rate rose from 10.5 percent in 2016 to 14.5 percent in 2018.
• After the drop: Among people in that age group who had lost Medicaid in the prior year, 50 percent reported serious trouble paying medical debt, 56 percent delayed care because of cost, and 64 percent delayed taking medicines because of cost.

That survey, published in Health Affairs, also found a 13.2 percentage point drop in Medicaid or Marketplace coverage for Arkansans ages 30 to 49 relative to other ages and states. More than 70 percent of Arkansans in the study were unsure whether the policy was even in force. The hours were not a mystery to researchers. They were a mystery to the people who had to report them.

KFF’s later national read of 2023 Current Population Survey data found nearly two-thirds of Medicaid adults working full or part time, among those under 65 who are not on Social Security disability benefits and not also on Medicare. KFF put the combined share who were working, caregiving, ill or disabled, or in school at 92 percent, with 8 percent retired, unable to find work, or out for another reason. An 80-hour rule aimed at that last slice still has to be administered against the other 92 percent. That is where Arkansas lost people.

Most Nebraska Losses Came From Unanswered Notices

Nebraska did not wait for 2027. It began checking expansion adults on May 1, 2026, using wage files where it could and a self-declaration form where it could not. People who could not be matched automatically got a notice and 30 days. KFF’s write-up of early Nebraska application and renewal data, drawn from the state’s September 17, 2026, Medicaid Advisory Committee meeting, is the first public look at a state running the federal rule.

NEBRASKA MAY TO AUGUST 2026

Add the 557 denied applications to the 533 closed renewals and 1,090 people were turned away or dropped on the work test through mid-August. Among applicants who met the hours, 92 percent did it by working 80 hours or showing $580 in household income. Among renewals who met the hours, 97 percent did the same. School, volunteering, and mixed hours were rare. The people who kept coverage were, in the main, already working or already in an excluded group.

Silence did the rest. Among denied applicants, 84 percent never answered the request for more information. Among people who lost coverage at renewal, 92 percent did not respond. Only a small share were affirmatively found not to be working. That is the Arkansas mechanism at a smaller scale, in a state that is still letting people attest in writing through 2027.

CMS has already told Nebraska it must change how it verifies medical frailty. Starting in January 2028, except for frailty, states must ask for documents when they do not have data on file. The first-year honor system is doing some of the work that a portal in Arkansas did not. When the honor system ends, the non-response share has more room to grow.

Who Is Exempt From the 80-Hour Rule?

Parents and caretakers of a dependent child 13 or younger, or of a disabled person, do not have to meet the hours. Pregnancy and postpartum coverage, American Indian and Alaska Native status, former foster youth, veterans with a total disability rating, SNAP households that are not exempt from SNAP work rules, TANF work-rule compliance, drug or alcohol treatment, and incarceration also take a person out of the test. The medically frail exemption is narrower than many state officials expected, because CMS requires both a qualifying condition and a showing that the condition significantly impairs the ability to meet the hours.

WHO DOES NOT HAVE TO LOG THE HOURS

• Parents and caregivers: A parent, guardian, caretaker relative, or family caregiver of a child 13 or under, or of a disabled individual, is excluded.
• Medical limits: People who are disabled or medically frail, including those with a serious or complex medical condition, a disabling mental disorder, a substance use disorder, or an ADL-limiting disability, are excluded if the condition impairs compliance.
• Other statutory outs: Pregnancy or postpartum coverage, American Indian or Alaska Native status, former foster care youth, veterans with a 100 percent disability rating, SNAP or TANF work-rule status, treatment for drug or alcohol use, and recent incarceration all take a person off the test.
• Short-term hardships: States may, but need not, excuse a month for inpatient care, a presidential disaster, county unemployment at or above 8 percent or 1.5 times the national rate, or extended travel for medical care.

Unpaid family caregiving that does not meet the exclusion can still count toward the 80 hours, under CMS’s definition of unpaid work. Caregivers who are not related to the person and do not live with them may have to show 80 hours of care. Parents who live with a child under 14 generally do not. That split is why caregivers keep showing up in the concern around this rule. The exclusion is real for a parent of a 10-year-old in the house. It is a documentation problem for a daughter driving across town to a parent with dementia, or for a parent of a 14-year-old who still cannot be left alone after school.

In Nebraska’s applicant pool, a third of the exclusions were parents or caregivers, a quarter were medically frail, and 12 percent were American Indian or Alaska Native. On renewals, frailty was the largest exclusion, which fits a state that already holds medical claims on people it has been covering. States are told to check exclusions first, before they ask anyone to log hours. A state that is slow to flag frailty from its own files will send work notices to people it should have left alone.

Millions at Stake in the Coverage Counts

CMS and the Congressional Budget Office do not agree on how many people the work test will remove. CMS, in the rule, projects about 3.1 million people lose Medicaid in the first full year and about 3.3 million a year by 2033. The Urban Institute, reading CBO, puts the work requirement’s Medicaid enrollment drop at about 5.7 million in 2034, with RAND near 5.3 million. Those are different estimators of the same policy, not a range from one shop.

COVERAGE LOSS ESTIMATES FOR THE WORK TEST

The gap is the paperwork. CMS assumes a large share of people will move into qualifying activities and that procedural drop-off will stay modest. CBO and RAND bake in more of what Arkansas already produced: eligible people who do not complete the file. Brookings researchers reviewing the CMS rule said the agency’s assumed job response sits far above the welfare-to-work and state-waiver studies on the shelf. CMS has said prior state programs are not a direct match because the federal design, the grants, and the data matching are different.

Self-attestation through 2027 is the main reason a Nebraska-style 7 percent renewal loss could look smaller than Arkansas. It is also temporary. When states must collect documents in 2028, gig workers with several part-time jobs, people who move often, and anyone who misses a mailed notice become the test of CMS’s lower count. Six-month eligibility renewals, a separate piece of the same 2025 law, will run in parallel and add another round of forms for expansion adults.

Hospitals Inherit the Bill When Coverage Lapses

People who lose Medicaid do not disappear from emergency departments. A Commonwealth Fund analysis that used Urban Institute coverage-loss estimates found hospitals in expansion states could see operating margins cut 11.7 percent to 13.3 percent, with safety-net hospitals at 25.9 percent to 29.6 percent. The same study put the rise in uncompensated care at $7.0 billion to $8.0 billion. Those figures are model results, not 2027 books, and they assume large coverage losses land as uninsured visits.

Hospital finance staff are already treating the work test as a front-desk problem. Eligibility screening, help with the 30-day notice, and follow-up after a visit are how a system keeps a Medicaid payer attached to a patient who would otherwise age into self-pay. Disproportionate-share payments and 340B drug pricing both depend on a hospital’s Medicaid load. A steep drop in enrolled patients can threaten those streams even if the emergency room stays full.

Rural facilities have less room. They already run thin Medicaid and Medicare mixes, and they are often the only place a dropped enrollee can go. Oregon Gov. Tina Kotek said in June 2026 that the rules could strip insurance from thousands of Oregonians who are already eligible, and that she had led a coalition of governors against a rollout she called unworkable. The counter from supporters is blunt: 80 hours a month of work, training, or service is a low bar, and Medicaid should not pay for adults who will not meet it. Eighty hours is a low bar if the state already sees the wages. It is a high bar if the only proof is a letter that never gets a reply.

Indiana Already Counts 58,000 HIP Members Offside

The Indiana Family and Social Services Administration said on October 5, 2026, that over 58,000 HIP members may not currently be in compliance with, or exempt from, the Healthy Indiana Plan work requirements that begin January 1, 2027. That is a pre-enforcement count, not a mass cutoff. Indiana is using a three-month lookback, so a person who applies in January 2027 must show qualifying activity in October, November, and December 2026.

The lookback is why the rule is no longer a next-year story for anyone in a state that copies Indiana’s clock. Hours in October 2026 already sit inside a January file. Town halls and member notices are the state’s attempt to shrink the 58,000 before the first denial letters go out. Nebraska’s unanswered-notice share says some of those letters will still die in a pile of mail.

Starting in January 2028, states generally must collect documents when they lack data on file, and Nebraska is already being told to tighten how it verifies medical frailty. That is the point at which the Arkansas file, the Nebraska non-response share, and Indiana’s 58,000 start to describe the same machine running at full speed.

Disclaimer: This article is news reporting and analysis of federal and state Medicaid rules. It is for information only and is not medical advice, legal advice, or a determination of anyone’s eligibility for Medicaid, Medicare, or any other public benefit. Readers who need to know whether they must meet work or community-engagement hours, or whether they qualify for an exemption, should contact their state Medicaid agency or a qualified benefits counselor before they act on coverage decisions. Hours, exemptions, lookback months, and enrollment status can change as CMS and the states issue new guidance, and the figures here reflect the agency and research sources named above as of the dates on those documents.