Should states be allowed to require Medicaid recipients to work or volunteer in order to keep their health coverage?

Background

Medicaid work requirements have become one of the most consequential health policy debates in the United States. The 2025 budget reconciliation law, signed by President Trump on July 4, 2025, mandates that adults aged 19 to 64 covered through the Affordable Care Act's Medicaid expansion must complete at least 80 hours per month of work, volunteering, education, or community service to maintain their health coverage. According to KFF, 43 states will be required to implement these rules by January 1, 2027, though some states, including Nebraska, have already begun enforcement. The Congressional Budget Office estimates that work requirements will reduce federal Medicaid spending by roughly $326 billion over ten years and account for the largest share of projected coverage losses under the law. The law includes exemptions for certain groups, such as pregnant individuals, people with disabilities, caregivers of young children, and those in high-unemployment areas, though the details of implementation are still being finalized by the Department of Health and Human Services.

Supporters argue that work requirements promote personal responsibility and self-sufficiency, encouraging able-bodied adults to engage in productive activity as a fair condition of receiving taxpayer-funded health coverage. Some governors, such as South Carolina's Henry McMaster, have contended that Medicaid without work requirements discourages low-income families from seeking additional employment. Opponents counter that the policy is largely unnecessary and potentially harmful. KFF found that in 2023, 92 percent of non-elderly Medicaid adults were already working or had qualifying reasons for not working, such as caregiving, illness, or school attendance. Research from Arkansas, the first state to implement Medicaid work requirements in 2018, showed that more than 18,000 people lost coverage, primarily due to administrative reporting barriers rather than failure to work, and the program produced no measurable increase in employment. Critics including the Robert Wood Johnson Foundation and the Commonwealth Fund point to Georgia's experience, where administrative costs consumed the majority of program spending, and warn that reporting burdens will cause eligible people to lose coverage.

The stakes are significant. The CBO estimates that 4.8 million people will lose Medicaid coverage specifically due to work requirements over the next decade, though some analysts project higher numbers. Those who lose Medicaid coverage under these rules are also barred from receiving subsidized ACA marketplace coverage, leaving them with few affordable insurance options. The policy disproportionately affects low-wage workers with unstable hours, older adults aged 50 to 64 with chronic health conditions, and people with undiagnosed disabilities who may struggle to obtain exemptions. How states design their verification systems, outreach strategies, and exemption processes will significantly shape whether the policy mainly encourages workforce participation or primarily results in coverage losses among vulnerable populations.