State Choices in Medical Frailty Work Requirement Exemption Can Keep Eligible People Covered

As part of the harmful Republican megabill (H.R. 1) enacted in July 2025, Congress introduced a burdensome work requirement for Medicaid eligibility that will put certain enrollees at risk of having their health coverage taken away. Individuals who are considered medically frail are, on paper, exempt from this new requirement. However, without carefully crafted policies and systems, many people with serious health conditions could lose coverage despite being eligible. Fortunately, there are concrete steps states can take that can reduce coverage losses for eligible populations, including those who are medically frail.

To mitigate harm, states need to develop processes for effectively identifying and exempting people who should be considered medically frail from the requirement. Twelve states already have a process for determining medical frailty (designed for determining which benefits some enrollees can access). However, they should revisit both their definitions and processes to make sure they are well aligned to the task of identifying people who have health conditions that should exempt them from the work requirement. The remaining states will have to create definitions and processes from scratch.

The H.R. 1 definition classifies a medically frail individual as someone: “who is blind or disabled; with a substance use disorder; with a disabling mental disorder; with a physical, intellectual or developmental disability that significantly impairs their ability to perform 1 or more activities of daily living; or with a serious or complex medical condition.”

Individuals who have significant health issues already face additional barriers in navigating the complex application and renewal process due to their vulnerable health status. While the Centers for Medicare & Medicaid Services (CMS) will release further guidance around implementing the exemption, CMS has signaled that its approach will build on current regulations. Therefore, states should act now to help medically frail individuals successfully navigate new red tape requirements by implementing best practices throughout each step of the process, including:

• Implementing an inclusive medical frailty definition. State agencies should strive to capture an inclusive set of physical and mental health conditions under the new H.R. 1 definition of medical frailty that encapsulates, for instance, people who would be unable to work or at risk of serious illness or death without access to health care. Agencies should build on examples from other states but recognize that the medical frailty definitions states are currently using for purposes not related to the work requirement are likely too narrow.
• Creating a comprehensive list of codes. States will need to create a list that combines diagnostic and service utilization codes to capture an individual’s medical frailty status. States should ensure that the codes they identify include the wide array of conditions that fall under their definition of medical frailty. As a starting point, they can review state examples of diagnostic code lists. However, they should recognize that diagnostic code lists alone are too narrow for the purpose of determining work requirement exemptions. States should ensure the lists they create combine and analyze diagnoses, claims, and encounter data using specialized algorithms to capture a full picture of all those who should qualify for this work requirement exemption.
• Connecting to existing data sources. States should use existing data sources to proactively exempt medically frail individuals, such as those enrolled in Medicaid waiver programs, like waivers for home and community-based services. States should also ensure that their eligibility system logic is updated to link to claims, encounter, diagnostic, and other data from Medicaid management information systems, managed care organizations, SNAP, and other state data sources used to identify medically frail individuals. This is an important way to provide exemptions without requiring additional work on the part of beneficiaries and to limit administrative burden on caseworkers.
• Designing a medical frailty screener. Some people, including new applicants and people facing new health barriers, won’t be identified for an exemption through existing data. States should design a user-tested screener for the application and renewal process that is in plain language to allow individuals to provide the health information the state needs to determine whether they meet an exemption. This will help particularly because some may not have claims or diagnostic data at the time of application. It will be important to design questions in a way that people are likely to accurately self-identify and to ask about their health status in multiple ways. For example, states can ask whether someone has a condition that requires regular treatment, or that could lead to death if untreated, in addition to asking about limitations with daily activities. This may make it more likely for a cancer patient (who may not view their condition as impairing their ability to perform activities of daily living) to answer accurately.
• Streamlining the exemption verification process. CMS is reportedly considering restrictive verification policies, such as making even exemptions for permanent conditions subject to re-verification every 12 months. To the extent allowable by forthcoming CMS regulations, states should streamline the verification and re-verification process to reduce administrative and paperwork burdens on both enrollees and agencies. States should also strive to accept information reported and documented by the applicant when possible and ensure that applicants and enrollees can easily submit any additional requested documentation (in the same ways that they can submit applications and renewals through multiple modalities, such as online, via mail, and in person) to verify their exemption.
• Engaging enrollees or potential applicants with complex health conditions as states design their processes, applications, verification requirements, and IT systems. As with all components of work requirement implementation, state agencies should maintain and utilize close lines of communication with enrollees, former Medicaid beneficiaries, people who may need to apply for Medicaid for the first time in the future, enrollment assisters, and community health providers to hear perspectives on how decisions on medical frailty policy and implementation will impact enrollees, assisters, providers, and other Medicaid stakeholders. The new requirements for states to convene Medicaid Advisory Committees (MACs) and Beneficiary Advisory Council (BACs) present an opportunity for states to gain valuable feedback and ensure Medicaid enrollees’ voices are centered in policy decisions. States can use MACs and BACs to test their newly designed systems before launching them, get input and feedback, and make changes as needed.

By making proactive choices in how they implement their medical frailty exemptions, states can reduce unnecessary coverage loss and protect Medicaid access for people with the greatest health needs.