Falling Through the Cracks: Major Gaps in Medicaid Work Requirement Policy

The Medicaid work requirement in the harmful 2025 Republican reconciliation law will take away health coverage from millions of people. It’s clear from past experiences with work requirements that many eligible people will be caught in the administrative burdens of the work requirement and lose coverage. In addition to these burdens, the policy details of the law create fundamental complications and gaps — including some that might be surprising even to the law’s supporters — that will prevent many people from qualifying for coverage under the new structure.

The work requirement could take away or block coverage from people who are looking for work, who are hospitalized, or who miss deadlines through no fault of their own. Conditioning medical care, a basic need for every person, on meeting a harsh work requirement is a fundamentally flawed policy. As enacted in the Republican reconciliation law, the work requirement is a complex policy maze that will be difficult to correctly program into state systems, complicated to communicate to health professionals and others who help connect people to coverage, and extremely difficult for families to understand and comply with. It will take away health care from millions of people trying to get by, including the situations described below, and Congress should repeal it.

Consider the following hypothetical examples. In these examples, we assume the state does what it can within the federal rules to limit coverage loss by requiring applicants to verify they meet the work requirement in the one month prior to the month they apply; requiring one month of compliance or exemption at renewal; and adopting the optional short-term hardship exceptions, including for receiving care in an acute care setting like a hospital.

• People looking for work. Daniel loses his job — and health insurance — in June. He immediately begins applying for new jobs, but nothing has come through yet. He applies for Medicaid in August.

  Republican Reconciliation Law: Job search doesn’t “count” as meeting the work requirement (except in narrow circumstances when part of a SNAP or unemployment insurance work program).

  Outcome: Daniel remains uninsured. When Daniel applies for Medicaid in August, he must show he met the work requirement in July. But since job search isn’t a countable activity, he isn’t eligible.

• People who are hospitalized. Gloria was out of work in February. She gets into a car accident in March and is hospitalized. She applies for Medicaid in March while hospitalized.

  Republican Reconciliation Law: People who are hospitalized qualify for a short-term hardship exception from the work requirement during the month of their hospitalization, but when they apply, they still have to comply with, or be exempt from, the work requirement during the lookback period (the month before). Even if people request retroactive coverage, they must show they met the work requirement during the lookback period before the retroactive month.

  Outcome: Gloria can’t get Medicaid coverage for her March hospitalization (unless she qualifies for a medical frailty exclusion) because when she applies in March, she must show she met the work requirement in February (the one-month lookback period in her state), which she didn’t. If she applies again and enrolls in Medicaid in April (when her hospitalization qualifies her for an exception from the work requirement in March), her Medicaid will begin in April, and she won’t have coverage for her hospital stay in March.

  If she requests retroactive coverage for March, she will still have to show she met the work requirement in February, which she didn’t. This is because retroactive coverage only applies if a person would have otherwise been eligible for Medicaid during the retroactive period — which includes satisfying the work requirement during the lookback period.

• People who miss deadlines through no fault of their own. Fatima works at a retail store and gets a lot of holiday hours in November and December, but her employer cuts her hours in January after the holiday shopping rush is over. Her Medicaid is due for renewal in January. She recently moved and reported her change of address to the Medicaid agency, but her renewal forms had already been sent to her old address. She doesn’t receive her Medicaid renewal paperwork in the mail and finds out she lost coverage in early February when she goes to fill a prescription. Fatima immediately contacts her Medicaid agency and submits the required paperwork.

  Republican Reconciliation Law: At renewal, enrollees must show they met the work requirement in at least one month since the beginning of their eligibility period. However, if they submit their renewal paperwork late (within 90 days of the end of their eligibility period), it is treated as a new application, and they must show they met the work requirement in the month prior to when they submitted it.

  Outcome: Fatima is unable to reinstate her coverage since she didn’t get 80 hours of work in January. She would have been able to renew if her renewal was completed on time in January, since she worked more than 80 hours in November and December (within the renewal lookback period). However, when she submits her paperwork in February, it is treated as a new application, and she has to show she met the work requirement in January.

The harsh consequences of the Medicaid work requirement will be even worse in states that choose to require more months of compliance at application and renewal and fail to adopt the optional short-term hardship exemptions.