Medicaid Work Requirements Are Now Law: Millions of Americans Could Lose Health Coverage by 2027

The ‘One Big Beautiful Bill’ requires states to enforce an 80-hour monthly work rule by January 2027. Experts warn up to 5 million people will be cut from Medicaid, and Nebraska has already started.

If you or someone in your family receives Medicaid, your coverage could be at risk. A sweeping new federal law, signed on July 4, 2025, requires millions of Americans to prove they are working, volunteering, or in school every single month or face losing their government health insurance. The deadline for most states is January 1, 2027, and one state has already started enforcing it.

Nebraska became the first state in the nation to activate the new rules on May 1, 2026, eight months ahead of the federal deadline. Thousands of Nebraskans woke up that morning unsure if they would still have health insurance by the end of the month.

This is not a distant policy debate. The Congressional Budget Office estimates that work requirements will cause 5.2 million adults to lose Medicaid coverage by 2034, and the American Medical Association says as many as 11.8 million people could ultimately be affected. Here is what you need to know.

AT A GLANCE

Law signed	July 4, 2025, One Big Beautiful Bill Act (H.R. 1)
Who is affected	Medicaid adults ages 19–64 in ACA expansion states
Work requirement	80 hours per month of qualifying activities
State deadline	January 1, 2027 (Nebraska started May 1, 2026)
Projected coverage losses	Up to 5.2 million by 2034 (CBO estimate)
Federal savings	$326 billion over 10 years from work requirements alone

What Is the ‘One Big Beautiful Bill’ and What Does It Actually Say?

The One Big Beautiful Bill Act, formally H.R. 1, is a massive budget reconciliation package that President Donald Trump signed into law on Independence Day 2025. It is the most sweeping overhaul of Medicaid since the program began in 1965.

The law’s Medicaid section introduces what it calls ‘community engagement requirements.’ In plain English: if you are between 19 and 64 years old, enrolled in Medicaid through the Affordable Care Act expansion, and not exempt, you must now prove every month that you are doing at least 80 hours of qualifying activity.

Qualifying activities include:

• Paid employment (any job)
• Job training or workforce development programs
• Enrollment in an educational program at least half-time
• Community service or volunteer work
• A combination of the above

Key Deadline to KnowHHS must release implementation guidance to all states by June 1, 2026. Every state with Medicaid expansion must have work requirements in place by January 1, 2027, or risk losing federal funding. States can start sooner, as Nebraska already has.

Who Is at Risk of Losing Coverage?

The work requirements apply to adults ages 19 to 64 who are enrolled in Medicaid through the ACA expansion, a group that covers roughly 18.5 million Americans, according to the CBO.

However, there are significant exemptions. You do NOT have to meet the work requirement if you:

• Are medically frail or have a qualifying disability
• Have a serious mental illness or substance use disorder
• Are pregnant or were recently pregnant
• Are a primary caregiver of a child or dependent adult
• Are already enrolled in Medicare
• Are between jobs and actively looking for work (with documentation)
• Live in an area with insufficient jobs, as defined by federal guidance

The critical problem is this: advocates and health policy researchers warn that many people who legally qualify for exemptions will still lose coverage, not because they don’t qualify, but because they won’t know about the new rules, won’t understand the paperwork, or won’t be able to navigate a complex new bureaucratic process.

When Arkansas briefly piloted a similar program in 2018, approximately 18,000 people lost coverage before a federal judge shut the program down. Of those, studies found the vast majority were actually working or were already exempt, they simply failed to report correctly.

Nebraska Is Already Enforcing It, Here Is What Is Happening on the Ground

On May 1, 2026, Nebraska became the first state in the country to enforce Medicaid work requirements under the new federal law, eight months ahead of the national deadline. It is a preview of what is coming to most of the country.

Schmeeka Simpson, 46, of Omaha works three jobs, a patient navigator for the ACLU, an administrative assistant at a nonprofit, and shifts at a Dunkin’ shop. None of her employers offers health insurance. She has relied on Medicaid since her divorce in 2014. Even with three jobs, she told NPR she is terrified of losing coverage under the new rules because of how documentation requirements work.

“There is a lot of concern on many different levels,” said Jeremy Nordquist, president of the Nebraska Hospital Association. He warned that many enrollees received state letters about the new requirement but did not understand what was being asked of them.

By the Numbers in NebraskaNebraska has approximately 115,000 Medicaid expansion enrollees. Community health centers in the state estimate that losing 10% of those patients would result in $500,000 in lost revenue, threatening their ability to serve everyone, including patients who still have coverage.

How This Affects Every State, Not Just Nebraska

While Nebraska is the test case, 40 states plus Washington, D.C. have expanded Medicaid under the ACA. All of them are now required to build systems to verify enrollees’ work status on a monthly basis and implement full enforcement by January 1, 2027.

Seven additional states have active applications with the Centers for Medicare & Medicaid Services to start enforcement even earlier, including Arkansas, Arizona, Iowa, and Montana.

According to a RAND Corporation analysis released in May 2026, total state Medicaid budgets will be cut by $665 billion over the 2025–2034 period under the new law. Three states, Arizona, Iowa, and Nevada, are projected to see Medicaid spending reductions of more than 15 percent.

Rural hospitals are expected to be hit especially hard. Medicaid payments make up a disproportionate share of rural hospital revenue. While the new law includes $50 billion in rural hospital funding over five years, multiple health policy experts say that falls far short of offsetting the broader cuts.

What Happens If You Don’t Comply?

If a state’s system finds that you have not met the 80-hour monthly requirement, and you do not qualify for an exemption, here is the process:

• The state must send you a notice of non-compliance by mail and at least one other method (text, phone, or email).
• You have 30 days from receiving the notice to demonstrate compliance or prove an exemption applies.
• If you fail to respond or cannot prove compliance, your Medicaid coverage is terminated.
• To get coverage back, you must reapply, which triggers a fresh compliance review.
• Under the new law, people who lose Medicaid due to work requirements are also banned from receiving subsidized Marketplace coverage through the ACA. This means you could be left with no affordable insurance options at all.

“Basically, the law creates a situation where you can fall through every crack,” said Anthony Wright, executive director of healthcare advocacy group Families USA. “You lose Medicaid, you can’t get Marketplace coverage, and you’re uninsured.”

What Should You Do Right Now to Protect Your Coverage?

If you or a family member is currently on Medicaid, do not wait until 2027 to act. Here are the steps health policy advocates recommend:

• Find out if your state is implementing work requirements early, check your state Medicaid agency website now.
• Start tracking and documenting your hours. Keep records of pay stubs, school enrollment confirmation letters, or volunteer logs every month.
• If you believe you qualify for an exemption (disability, pregnancy, caregiver status), contact your state Medicaid office NOW and ask how to file documentation before enforcement begins.
• Watch your mail. States are required to notify you before enforcement. Do not ignore letters from your state Medicaid agency.
• Contact a local legal aid organization or healthcare navigator if you need help understanding the requirements or filing an exemption claim.
• If you lose coverage and believe it was wrongful, you have the right to a fair hearing. Request one immediately, do not delay.

Find Your State’s Medicaid OfficeVisit medicaid.gov and click ‘State Overviews’ to find your state’s Medicaid agency contact information, work requirement timeline, and exemption application process.

What Doctors and Medical Groups Are Saying

The response from the medical community has been overwhelmingly critical. The American Medical Association, representing more than 270,000 physicians, issued a statement calling the law’s changes to Medicaid cuts that will “worsen patient access to care.”

More than 90 physician organizations co-signed a letter to congressional leadership warning that the combination of work requirements, more frequent eligibility checks, and reduced federal funding would cause irreversible harm to low-income patients.

Health policy researchers at KFF (formerly the Kaiser Family Foundation) analyzed who actually receives Medicaid and found that the majority of Medicaid adults under age 65 are already working, or face documented barriers to work such as illness, disability, or caregiving responsibilities. The research suggests work requirements do not increase employment. They primarily increase paperwork, and increase the number of uninsured Americans.

THE BOTTOM LINE

Medicaid work requirements are no longer a proposal, they are federal law, and enforcement is already starting. With up to 5.2 million Americans projected to lose coverage, this is one of the most consequential health policy changes in a generation. If you rely on Medicaid, now is the time to understand the new rules, document your qualifying activities, and protect your access to care before the January 2027 deadline hits your state.