Who Will Be Impacted by Medicaid’s New Work Requirements? Understanding the Real Population Behind the Policy

This article is part of our ongoing series on Medicaid Eligibility Series where we’re exploring the far-reaching implications of the One Big Beautiful Bill Act (H.R.1).

The Access-to-Care Lens: Why Work Requirements Matter

The new Medicaid work requirements in the 2025 budget law (H.R.1, the OBBB Act) are set to redefine who can get (and keep) health coverage. And with coverage comes access to care. For state Medicaid agencies and public health leaders, this policy shift introduces a tension: how to align coverage with employment goals without creating new barriers for people who already face instability. Even when well-intentioned, work-tied eligibility rules often hit vulnerable populations hardest.

Who Will Be Required to Work, and Report It

The mandate applies primarily to low-income adults covered through Medicaid expansion or certain Section 1115 waiver programs. In the 41 expansion states (plus D.C.), nearly all adults up to 138% of the Federal Poverty Level—mainly adults under 65 without disabilities or young children—will need to complete and document 80 hours per month of qualifying activities such as employment, job training, education, or community service.

These work requirements become conditions for both initial enrollment and renewal, meaning uninterrupted coverage depends on continuous reporting.

Who Is Exempt, and Where the Gaps Remain

Some groups are excluded by law, including:

• Pregnant and postpartum women
• Parents or caretakers of children under 14
• Individuals deemed “medically frail” (including serious mental or physical health conditions or substance use disorders)

These exemptions reflect an acknowledgment that health or caregiving responsibilities can make full-time work unrealistic.

But the policy’s limits are significant.

• Older adults nearing Medicare eligibility are not exempt, unlike in past state waivers. Even those in their late 50s or early 60s must meet the requirement unless they fit another exemption, despite the often-high rates of chronic illness in this age band.
• Many people with health conditions do not meet the strict SSI disability criteria and therefore remain in the expansion group subject to work rules. In practice, individuals with substantial health challenges may still be required to work to maintain coverage.

The Myth of the “Able-Bodied Non-Worker”

A core assumption behind work requirements (that Medicaid is filled with able-bodied adults choosing not to work) is not supported by evidence.

Among non-elderly adult Medicaid enrollees not receiving SSI/SSDI, 92% are either working or have a valid reason not to work, such as:

• Caregiving responsibilities
• Illness
• Enrollment in school

Only about 8% report being out of work for other reasons, such as retirement or difficulty finding employment.

What These Requirements Really Do: Add Administrative Hurdles

Given these realities, the new policy won’t draw large numbers of new workers into the labor force. Instead, it primarily adds administrative complexity for people who are already working or already stretched thin. And for many, their jobs offer no health benefits at all. Workers in service, agricultural, and other low-wage sectors rely on Medicaid precisely because employer-sponsored insurance is rare or unaffordable.

These individuals will now be responsible for monthly reporting and documentation, tasks that may be simple on paper but burdensome in practice. Missed paperwork, not missed work, becomes the trigger for losing coverage.

If your organization is planning for policy-driven operational changes, Infocap can help you translate complex requirements into scalable, resilient process automation and AI. Reach out to us to get started.