Medicaid Work Requirements Are Starting Early in Some States. CMS Expects 2.3 Million to Lose Coverage.

Medicaid work requirements are not supposed to take effect nationwide until January 1, 2027, but in Montana and Arkansas the paperwork checks have already begun.

What You Should Know

The 2025 federal reconciliation law requires most states to condition Medicaid eligibility for adults in the Affordable Care Act expansion group on meeting work requirements starting January 1, 2027, but states can start earlier, according to KFF. Nebraska moved first, beginning May 1, 2026. Montana began enforcing the requirement July 1, 2026, and Iowa plans to start December 1, 2026. Arkansas launched a soft implementation July 1, 2026, checking and notifying enrollees but not disenrolling anyone for noncompliance until January 2027, KFF reported.

CMS projects the requirement will reduce Medicaid enrollment by about 2.3 million people in 2027, and roughly 3.2 million annually thereafter, according to its regulatory analysis; the Congressional Budget Office’s independent estimate is higher, at about 5 million.

The Pressure Point

A total of 43 states, including 41 expansion states plus Washington, D.C., and two states with partial-expansion waivers, must implement the requirement, KFF reported. About 20 million people were enrolled in the Medicaid expansion group as of June 2025, representing 30 percent of enrollment in expansion states. States must verify compliance at application and at least every six months, though Indiana and New Hampshire will check quarterly.

The Receipts

KFF’s survey of state Medicaid officials, conducted with Georgetown University’s Center for Children and Families, found most states had not finalized key decisions in early 2026, including how to verify medical-frailty exemptions and what documentation will count as proof of work. Twenty-nine states plan to adopt at least one optional hardship exception, and 26 of those plan to adopt all four; a handful, including Indiana and Iowa, plan to adopt none, KFF reported.

What Happens Next

Enrollees in Montana and Arkansas should expect verification notices now, even though disenrollment in Arkansas will not begin until January 2027. For the remaining states, the national clock starts January 1, 2027, when enrollees must show 80 hours a month of work or qualifying activity at application and every six months after. States still finalizing exemption rules face a narrowing window to notify enrollees.

References: KFF