Medicaid Work Requirements and People With Disabilities

Understanding the New Federal Medicaid Work Requirements

For most of its sixty-year history, Medicaid eligibility has rested on who a person is and how much they earn, not on whether they hold a job. That long-standing approach changed with the 2025 budget reconciliation law, known as H.R. 1, which was signed on July 4, 2025. The law creates, for the first time, a nationwide work requirement - often called a community engagement requirement - that ties continued Medicaid coverage to participation in approved activities (Center for Health Care Strategies, 2025). For people with disabilities, many of whom rely on Medicaid for the everyday supports that make work and independent living possible, the details of this shift carry real weight.

The requirement applies to adults aged 19 to 64 who are enrolled through the Affordable Care Act's Medicaid expansion or through a comparable Section 1115 waiver that provides what the law calls minimum essential coverage. In states that adopted expansion, this group generally includes adults earning between the traditional Medicaid income cutoff and 138 percent of the Federal Poverty Level. As of mid-2025, 41 states had adopted Medicaid expansion, and more than 20 million adults were covered through it (Center for Health Care Strategies, 2025).

Main Content

What Counts as a Qualifying Activity

To keep coverage, an affected enrollee must complete at least 80 hours per month of one or more qualifying activities. These include paid employment, participation in a work program such as job training, enrollment in an educational program on at least a half-time basis, community service, or any combination of these (Center for Health Care Strategies, 2025). Eighty hours a month works out to roughly 20 hours a week - a meaningful commitment for someone managing a fluctuating health condition, an unpredictable work schedule, or limited transportation.

One feature stands out: the requirement is non-waivable. States cannot use a Section 1115 demonstration waiver to set it aside, which removes a flexibility that states have historically used to tailor Medicaid rules to local conditions (Center for Health Care Strategies, 2025).

The Implementation Timeline

The rollout follows a staged schedule. The U.S. Department of Health and Human Services (HHS) must provide implementation guidance to states by June 1, 2026, clarifying definitions and standards left open in the statute. The Centers for Medicare and Medicaid Services (CMS) issued initial guidance on December 8, 2025, with more expected through 2026. States must put the requirements in place by January 1, 2027, though they may act sooner through waivers. States that show a good-faith effort can receive an extension as late as December 31, 2028 (Center for Health Care Strategies, 2025).

The Exemptions, and Why Disability Sits at the Center of Them

The law spells out several groups that are not subject to the requirement. These include foster youth and former foster youth under age 26; American Indians and Alaska Natives eligible for Indian Health Service care; caregivers of a dependent child aged 13 or under or of a disabled individual; veterans with a disability rated as total; pregnant and postpartum individuals; people meeting work rules under other programs such as the Supplemental Nutrition Assistance Program; those in qualifying substance use disorder treatment; people who are incarcerated or were released within the prior three months; and individuals facing short-term hardships such as a federally declared disaster or residence in a county with very high unemployment (Center for Health Care Strategies, 2025).

The Medically Frail Exemption

The exemption with the broadest reach for the disability community is the one for people who are medically frail. Federal rules define this group to include those who are blind or disabled, people with a serious mental disorder or substance use disorder, those with a physical, intellectual, or developmental disability that significantly limits daily activities, and people with a serious or complex medical condition (Center for Health Care Strategies, 2025). On paper, this category appears to protect anyone whose health makes consistent work difficult. In practice, how a state defines and verifies medical frailty determines whether that protection actually reaches the people it names.

The Disability Gap That Makes This Policy Complicated

A central misunderstanding about the new rules is the assumption that people with disabilities are automatically safe because Medicaid already has disability-based eligibility. The data tell a more complicated story. Although about 34 percent of Medicaid enrollees report having a disability, only around 10 percent qualify for coverage through a formal disability determination (Commonwealth Fund, 2025). The rest are enrolled through income-based pathways, most often the expansion group - precisely the population the work requirement targets.

Why do so many people with disabilities enroll through income rather than disability? Income-based determinations are faster and far less burdensome than the disability determination process, which often relies on Supplemental Security Income criteria. Those criteria are strict and do not always reflect current medical understanding of how conditions limit a person's capacity to work. Research suggests that nearly two-thirds of Medicaid enrollees with self-reported disabilities would not qualify under the narrow SSI-based definition (State Health and Value Strategies, 2025). When Arkansas implemented its earlier work requirement, only about 45 percent of the state's disabled Medicaid enrollees were eligible through the main disability-specific category (National Health Law Program, 2025).

The consequence is that a large share of enrollees who genuinely cannot work, or can work only intermittently, are not shielded by an automatic disability label. Instead, they must affirmatively claim an exemption and prove they qualify - and that is where coverage is most often lost.

Lessons From Arkansas and New Hampshire

The country has already run two real-world tests of Medicaid work requirements, and both offer cautionary lessons. Arkansas put its requirement into effect from June 2018 through March 2019, the only instance in which a state disenrolled people for noncompliance before a federal court halted the policy. In just seven months, more than 18,000 people - roughly one in four of those subject to the rule - lost coverage, mostly because they failed to report their work status or document an exemption rather than because they were not working (KFF, 2025).

Studies of the Arkansas experience found that the policy increased the uninsured rate while producing no measurable increase in employment (Urban Institute, 2025). The reason is straightforward. As one analysis summarized, about 64 percent of adults on Medicaid nationally already work, and another 28 percent are disabled, in school, or caring for a family member, leaving only a small remainder who could work but do not (Tradeoffs, 2025). A requirement aimed at that small group ends up creating paperwork hurdles for everyone, and the people most likely to stumble over those hurdles are often those with health conditions.

New Hampshire's brief 2019 implementation reinforced the point. The state received only 1,951 medical frailty exemption requests, even though more than 10,700 enrollees had previously self-attested to that status. The gap shows how many eligible people with disabilities can be left unprotected when the exemption process itself becomes a barrier (State Health and Value Strategies, 2025).

How Exemptions Are Verified, and Where People Fall Through the Cracks

Under the new law, states must first use available data - such as payroll records or Medicaid claims and encounter data - to confirm compliance or eligibility for an exemption before asking applicants for more information (Center for Health Care Strategies, 2025). Automatic, data-driven verification is the best protection for people with disabilities, because it does not depend on someone understanding the rules and filing the right form at the right time.

The difficulty is that data matching only works when the right information exists in a database. A person whose disability is documented in claims data may be flagged automatically, but someone newly diagnosed, recently enrolled, or treated outside the Medicaid system may not appear. In those cases, the state may turn to health screeners or ask for confirmation from a treating provider. Each added step introduces friction. Requiring a physician's attestation, for example, places a burden on clinicians who serve large numbers of Medicaid patients and can create an impossible situation for the patient (KFF, 2025).

Consider a hypothetical enrollee with a serious chronic illness who has not seen a doctor recently because she has been managing symptoms at home. If her state requires medical documentation to grant the medically frail exemption, she cannot prove her condition without first obtaining care - yet she may need coverage to obtain that care in the first place. Advocates have urged states to accept a person's own declaration for the medically frail and caregiver exemptions, and to renew those exemptions automatically when a condition is unlikely to improve, precisely to avoid this kind of trap (Justice in Aging, 2026; Commonwealth Fund, 2025).

Outreach, Reporting, and Disenrollment

The law builds in communication requirements. State Medicaid agencies must conduct member outreach between June 30 and August 31, 2026, using regular mail plus at least one other method such as phone, text message, or email, and must repeat outreach at least every six months after implementation. That outreach must explain how to comply, who is exempt, the consequences of noncompliance, and how to report (Center for Health Care Strategies, 2025).

Verification also follows a rhythm. At application, states perform a look-back review covering one to three months, and they must confirm compliance for at least one month within each six-month renewal period. If verification fails, the state issues a notice of noncompliance through mail and one other channel, after which the member has 30 days to demonstrate compliance before being disenrolled (Center for Health Care Strategies, 2025). For someone with a cognitive disability, a sensory impairment, or unstable housing, a single missed notice or a confusing online portal can be the difference between keeping and losing coverage - which is exactly what happened to many enrollees in Arkansas who said they never learned the rule applied to them (KFF, 2025).

Projected Impact on Coverage and Spending

The Congressional Budget Office projects that the work requirement provision will reduce federal Medicaid spending by 344 billion dollars over ten years. It also estimates that H.R. 1 as a whole will lead 11.8 million people to lose Medicaid coverage over the next decade, with about 4.8 million of those losses attributable to the work requirements specifically (Center for Health Care Strategies, 2025; Congressional Budget Office, 2025). To support the transition, the law appropriates 200 million dollars to CMS in fiscal year 2026 and directs HHS to distribute another 200 million dollars to states (Center for Health Care Strategies, 2025).

What This Means for People With Disabilities Going Forward

The practical effect of the new requirements on the disability community will depend less on the statute's text than on the choices states make as they build their systems. States that lean on automatic data matching, accept self-declaration for the medically frail and caregiver exemptions, renew long-term exemptions without repeated paperwork, and provide accessible reporting options stand to protect far more eligible people than states that require fresh documentation at every step. Federal disability law adds another layer here, since states remain obligated to offer reasonable accommodations to applicants and enrollees with disabilities throughout the process (Commonwealth Fund, 2025).

For enrollees and the people who assist them, three steps matter most in the near term: confirming whether the requirement applies to a person's eligibility category, identifying which exemption fits and what proof a given state will accept, and watching closely for outreach notices once states begin contacting members in the summer of 2026. The history of Arkansas and New Hampshire shows that coverage is most often lost not because people are unwilling to work, but because the process for proving an exemption is hard to navigate. Understanding that process early is the surest way to keep coverage intact.

References:

• Center for Health Care Strategies. (2025). A summary of federal Medicaid work requirements.
• Commonwealth Fund. (2025). How medical frailty exemption policies can offer a lifeline to people with disabilities and chronic conditions.
• Congressional Budget Office. (2025). Estimated budgetary effects of Medicaid provisions.
• Justice in Aging. (2026). Mitigating the harms of Medicaid work requirements for older adults: Tools for state advocates.
• KFF. (2025). 5 key facts about Medicaid work requirements.
• KFF. (2025). The medical frailty exemption from Medicaid work requirements: Key issues to watch for in upcoming CMS guidance.
• National Health Law Program. (2025). How Medicaid work requirements hurt people with disabilities.
• State Health and Value Strategies. (2025). The disability gap in Medicaid: Implications for the federal work requirement proposal.
• Tradeoffs. (2025). Medicaid work requirements are back: What you need to know.
• Urban Institute. (2025). New evidence confirms Arkansas's Medicaid work requirement did not boost employment.

Insights, Analysis, and Developments

Author Credentials: Ian is the founder and Editor-in-Chief of Disabled World, a leading resource for news and information on disability issues. With a global perspective shaped by years of travel and lived experience, Ian is a committed proponent of the Social Model of Disability-a transformative framework developed by disabled activists in the 1970s that emphasizes dismantling societal barriers rather than focusing solely on individual impairments. His work reflects a deep commitment to disability rights, accessibility, and social inclusion. To learn more about Ian's background, expertise, and accomplishments, visit his full biography.