Federal Officials Have Spoken, and Now it’s the States’ Turn: “Lookback Period” for Medicaid Work Reporting Requirements

The Republican budget bill passed in July 2025 included massive cuts to health care and an upheaval of Medicaid eligibility requirements that will make it harder for millions of Americans to get on and stay on coverage. Now, in the aftermath of those severe cuts, states across the country are trying to implement these changes to comply with the new federal requirements.

On December 8, 2025, the Centers for Medicare & Medicaid Services (CMS) issued initial guidance to states as they put in place new Medicaid work reporting requirements, or what they’re calling “community engagement” requirements. While there are still many unanswered questions and more federal regulation to come, CMS has offered some useful guidance on how individuals can demonstrate compliance with these requirements.

As states establish work reporting programs in the coming year, there are notable flexibilities offered by the law to help states maximize the number of working people who can retain access to Medicaid.

Medicaid Work Reporting Requirements

Work reporting requirements mark one of the most consequential structural changes to Medicaid in over a decade. By January 2027, the Republican budget reconciliation bill (H.R. 1) requires adults enrolled in the ACA’s Medicaid expansion to demonstrate they are engaged in at least 80 hours per month of work or other community engagement activities (including education or volunteer activities). Alternatively, the law allows individuals to submit documentation showing they qualify for an exemption, such as having a serious medical condition or being a full-time caregiver.

The burden of additional paperwork to prove hours worked or various exemptions makes it much harder for working adults, caregivers, and people with disabilities to maintain their Medicaid coverage.

Families USA previously broke down why work reporting requirements are a solution in search of a problem, serving only to add costly red tape that forces people off of coverage and wreak havoc on state budgets.

Important Flexibilities in the Law: “Lookback Period”

Given the massive coverage losses that resulted from previous state experiments with work requirements, there is little doubt that many hard-working, Medicaid-eligible Americans will lose access to coverage under these requirements. However, states do have flexibility to make implementation decisions that mitigate coverage loss.

One important flexibility is that states can choose whether new Medicaid applicants and renewing beneficiaries have to demonstrate one-, two- or three-months’ worth of compliance to gain or maintain coverage (known as the “lookback period”). Under H.R. 1, the lookback period for initial applicants is the month(s) immediately preceding their application; upon renewal, the lookback is “during” the period between one eligibility determination and another (which, starting 2027, is at least once every six months).

In its December 8th guidance, CMS interprets “during” to mean that a Medicaid beneficiary renewing coverage can successfully demonstrate compliance if “during any part of the eligibility period” they are compliant. In addition, CMS’ guidance clarifies two key points:

1. Individuals can choose which month(s) they will use to demonstrate their work or community engagement activities, and their state cannot dictate which months count for compliance; and
2. If their state requires multiple months of compliance, individuals can decide whether to demonstrate their compliance in consecutive months or in a different manner.

CMS’ guidance confirms that individuals do not have to demonstrate compliance with work reporting requirements in every month (unless their state requires monthly verification, see below). Instead, compliance at some point between renewals is sufficient. This means that if a state requires one month of compliance, Medicaid beneficiaries can retain their coverage by demonstrating compliance for any one of the prior six months.

Importance of Lookback Period Flexibilities for Low-Wage Workers

This flexibility is critical for low-wage workers, not because this means beneficiaries will elect to work for only one out of every six months — after all, research shows that what motivates people to work is not any state requirement to do so, but the need to pay rent and utilities or buy food — but because it recognizes the realistic circumstances of uneven work hours, unpredictable work schedules, health problems or other challenges (lack of transportation or childcare, etc.) that prevent working Medicaid recipients from attaining 80 hours of work or community engagement in a given month. Flexibility to select which month(s) to demonstrate compliance allows individuals to retain their coverage through routine life changes, such as a gap in employment when switching jobs.

State Decision-Making in 2026

With clarity on the mechanics of the lookback period, states have two important decisions to make in the coming year:

1. Verification at Six-Month Redetermination or More Frequently?

For people enrolled in the ACA Medicaid expansion, H.R. 1 requires eligibility redetermination every six months. However, the law gives states discretion to verify work reporting requirements more frequently. If a state selects monthly verification, then the flexibilities outlined above no longer apply as individuals no longer have a choice in which month(s) to report.

Monthly verification would also mean significant numbers of working beneficiaries will fall off coverage: only about 44% of working adults on Medicaid can consistently meet all requirements every month. While this fact alone should alarm state decisionmakers, monthly verifications are also a fiscally irresponsible choice. Georgia (the only state with an active work reporting requirement program) scrapped its plans for monthly reporting due to ballooning administrative costs and other implementation challenges.

As implementing H.R. 1’s many requirements is already a huge undertaking for states — for example, Montana estimates it will have to hire 50 additional staff just to conduct more frequent eligibility redeterminations — states may not want to take up the greater administrative burden of monthly verifications. Indeed, Iowa and Arkansas, two states that have made early strides toward implementation, have indicated they plan to verify requirements once every six months.

2. Lookback Period: One or More Months of Compliance?

States must determine the length of the required lookback period (up to three months), and early discussions are already underway: Lawmakers in New Hampshire have publicly debated whether to set a three-month lookback period and South Carolina and Montana have each proposed a one-month lookback.

Showing just one month of compliance would make it easier for newly employed people without a long work history to apply for Medicaid. In addition, this policy would support current workers who have challenges meeting the monthly requirement given their work or life circumstances: Research shows that about 10% of working adults on Medicaid may only meet the 80-hour work requirement for one out of every six months.

On the other hand, a three-month window might better support individuals who have uneven work hours (for example, people working in the gig economy) as it might allow them to show compliance over a greater period. In Georgia, the state switched from monthly to annual reporting to better accommodate month-to-month fluctuations that occur in seasonal work and academic programs.

Perhaps the most reasonable approach is for states to require only one month of compliance but allow individuals to show up to three months if that helps them demonstrate their eligibility.

To demonstrate compliance, some workers may need to average their work hours across months or show compliance over a 30-day period that does not sync with a calendar month. In future implementation guidance, CMS should expressly encourage states to allow such reporting flexibility so their programs can capture a wider range of reasonable work circumstances.

Federal Work Reporting Requirements Pose Tremendous Challenges, but States Still Hold the Power to Help Keep People Covered

The Congressional Budget Office estimates 5.3 million people will lose access to Medicaid and become uninsured as a direct result of H.R. 1’s work requirement provision. However, the true number of people that ultimately do — or do not — lose coverage hinges on what state officials and lawmakers decide to do in the coming year in response to the new law.

States that want to cut coverage can heap bureaucratic burdens on individuals through monthly verification or put stringent parameters around the lookback period that favor a narrower set of workers. Or states can minimize harm by adopting flexible policies that recognize the reality of work for low-wage Americans and ensure Medicaid-eligible people maintain their coverage.

If you want to learn more about how you can work with your state to help mitigate harm from these new requirements, please reach out to us!