Inside the Work Reporting Requirement Implementation Guidance: How CMS’s New Rule Decimates Health Care Access for Millions

The Centers for Medicare & Medicaid Services (CMS) released its much-anticipated interim final rule with comment period (IFC) on June 1, 2026, provides guidance to states as to how they must implement new burdensome work reporting requirements in Medicaid by the start of next year. This rule impacts most of the 20 million Americans with Medicaid expansion coverage. This is not a small group or niche part of the community; these are our family members, friends, and neighbors.

Prior to the rule release, the Urban Institute estimated that between 4.9 and 10.1 million people could lose Medicaid coverage by 2028 because of the new eligibility requirements mandated in H.R. 1, depending on the decisions states make during implementation. However, this rule severely restricts state discretion in how they implement work reporting requirements, so actual coverage losses may be much worse. Additionally, implementation will result in a hefty administrative price tag, with some state officials projecting it will cost up to $30 million to implement a system designed to track and enforce work reporting requirements in their state alone — forewarning that the mere $200 million H.R. 1 set aside for all states is not going to cut it.

What’s Inside the IFC

Beginning January 1, 2027, H.R. 1 requires states to implement work reporting requirements for people with Medicaid expansion coverage in the 41 states and the District of Columbia that have taken up the option under the ACA, as well as in Georgia and Wisconsin, which partially expanded Medicaid through Section 1115 waivers. Adults subject to these rules must document at least 80 hours per month of work or other qualifying activities (such as participation in work programs, community service, or educational activities) or meet one of the law’s exemptions.

This is not as simple as checking a box on a Medicaid application or renewal form; it means people must track and submit paperwork as frequently as required by their state (which could be every month). Onerous paperwork requirements can be especially hard to navigate for people with multiple jobs, caregiving duties, or those seeking treatment for a serious or complex health condition. Millions of people are at risk of losing coverage not because they are ineligible, but simply because they cannot compile the necessary paperwork.

Vulnerable Populations are Especially at Risk

While there are many decisions made by CMS in this rule that will impact eligibility for adults with Medicaid coverage, Families USA is most concerned about two major policies that will make it much harder for the most vulnerable Medicaid populations to seek and maintain coverage.

Limiting Self-Attestation

Many people with serious health conditions who should qualify for medical frailty or other exemptions will struggle to prove their eligibility if their condition does not readily show up in medical records. For example, uninsured people who do not have access to health care providers or people who seek treatment outside of the traditional health care system (for example, substance use treatment offered in community settings) may not have any medical documentation available to them. But CMS now all but prohibits states from allowing people to self-attest (self-report) after 2027, instead requiring Medicaid enrollees to provide specific documentation of their health condition or circumstances. In the end, the rule will lead to more red tape, trapping the most vulnerable in a lengthy paperwork cycle and forcing states already strapped for resources to waste time and resources on documentation requirements.

Redefining “Medical Frailty” 

H.R. 1 explicitly exempts people who are “medically frail” from the work reporting requirement. However, under the rule the exemption now only applies to people who can prove they have a medical condition that falls within their state’s medical frailty criteria and can prove they cannot work because of their condition.

By linking medical frailty to work ability, CMS establishes new criteria far beyond what Congress included in the law, creating untenable administrative processes for states to determine a person’s capacity to work, such as:

• Heavier paperwork burden as nonstandard medical information (for instance a person with a chronic condition may not have a recent visit or formal diagnosis document, but would have symptom journals, clinical notes, or caregiver records) cannot be verified automatically, leaving the sickest and most vulnerable applicants with the greatest administrative load.
• Increased staffing needs as states must hire and train personnel to evaluate individuals’ work capacity in addition to health conditions.
• Significant administrative backlogs as these added steps slow down state systems and increase costs.

Beyond the administrative hurdles, CMS’ new policy will place many people with significant health needs in an impossible position: to keep their health coverage they must refrain from any work or qualifying activity, even if they would like to engage in some amount of part-time work to support themselves and their families. Consider this dilemma for someone in treatment for cancer:

• Option A: While they may be able to work some hours between rounds of treatment (and they may need to in order to afford medical costs), doing so could jeopardize their coverage as it would prove to the state that they have “capacity” to work.
• Option B: They can work 80 hours a month as a means of retaining Medicaid, but they must forgo the medical frailty exemption. However, maintaining this level of work may interfere with their treatment needs.

The binary choice between “working” and “medically frail” is not a clarifying one, but a bureaucratic trap that punishes people no matter what they choose.

The Big Picture

We already know that Medicaid work reporting requirements are a solution in search of a problem — most Medicaid recipients are already working. These new requirements will not improve care or increase employment, but they will cost states money and drain resources that could be better spent, and it will strip health coverage away from low-income people. New restrictions on proving medical frailty and limits on self-attestation for meeting exemption criteria are continued indicators of how H.R. 1 puts millions at risk of losing their health care.

To help advocates unpack the rule, Families USA has compiled a policy chart outlining both the statutory requirements and CMS’ implementation guidance, including where the IFC provides clarifications, goes beyond H.R. 1, and where questions remain. Families USA will continue monitoring the impact of this and other forthcoming rules, speaking out on the harms to hold the administration accountable, and sharing resources and opportunities to engage with our fellow advocates.

Tell Congress: Uphold your promise and protect Medicaid! Visit our Defending Medicaid page for more details and resources.