With the clock ticking toward a seismic shift in U.S. health policy, millions of Americans are bracing for a new reality: prove you’re working—or risk losing Medicaid. This looming requirement, set to take effect on January 1, 2027, as part of President Donald Trump’s One Big Beautiful Bill Act, is poised to reshape the safety net for low-income and medically vulnerable Americans in ways that have both policymakers and everyday people deeply concerned.
In California, the stakes are especially high. The state’s Medi-Cal program currently covers roughly 15 million residents—nearly 40% of California’s population, according to LAist. But under the new federal law, as many as 3 million Californians could be dropped from their health coverage if they fail to meet the new mandate: demonstrating at least 80 hours a month of work, school, job training, or community service. “At the end of the day, there’s not a full workaround,” said Hannah Orbach-Mandel, a policy analyst at the California Budget & Policy Center, as quoted by LAist. “But I do believe there are some ways that California can try to be a little creative about how the law is implemented, and people are looking into that now.”
California’s policymakers are scrambling for solutions. One idea on the table is leveraging the state’s projected $16.90 minimum wage in 2026 to allow recipients to prove eligibility based on income earned, rather than strictly on hours worked. This could, in theory, soften the blow for many working Californians who might otherwise get tangled in red tape. Yet, the details remain murky, as federal implementation guidelines have yet to emerge.
Nationally, the picture is just as fraught. More than 18 million Medicaid enrollees across 42 states and Washington, D.C., will soon be required to verify their work, volunteer, or school hours, as reported by KFF and The Associated Press. The burden doesn’t fall equally, however. Eight states that never expanded Medicaid—Alabama, Florida, Kansas, Mississippi, South Carolina, Tennessee, Texas, and Wyoming—are exempt from the new rules.
For those who rely on Medicaid due to chronic illness or disability, the uncertainty is even more acute. The law exempts people deemed “medically frail,” a category that includes conditions like blindness, disability, and substance use disorder. But the definition is vague, leaving states to determine who qualifies. “It’s terrifying,” said Eliza Brader, a 27-year-old Medicaid recipient from Indiana with a pacemaker and a painful joint disease, speaking to The Associated Press. “I already have fought so hard to get my health care.”
State officials and health advocates are sounding alarms about the potential for widespread coverage losses. “The stakes are incredibly high,” warned Kinda Serafi, a partner at the consulting firm Manatt Health, in an interview with The Associated Press. The nonpartisan Congressional Budget Office (CBO) projects that the work requirements will be the single largest driver of health insurance losses over the next decade. In fact, the CBO concluded in 2023 that such requirements would not increase employment or hours worked among Medicaid recipients, echoing findings from earlier experiments in states like Arkansas.
Arkansas’s 2018 effort to impose work requirements offers a cautionary tale. According to LAist, within seven months of implementation, 18,000 people lost their Medicaid coverage—not because they failed to qualify, but because they couldn’t navigate the maze of paperwork and verification. There was no meaningful uptick in employment, and the policy was halted by a federal judge the following year.
Despite these outcomes, the Trump administration and Republican lawmakers have pressed forward, arguing that Medicaid has grown too large and expensive, especially since its expansion under the Affordable Care Act. The nearly $1 trillion in projected Medicaid cuts over the next decade are expected to offset GOP priorities like border security and tax cuts, as detailed by The Associated Press. Critics contend that the policy is designed to shrink the program and force people off the rolls, with the CBO estimating that 6.3 million Americans could lose coverage—though some believe the real number could be even higher.
For states, the logistical hurdles are daunting. State Medicaid agencies must now devise systems to screen millions of applicants and current enrollees for both work status and medical frailty—a task for which most eligibility systems are ill-prepared. Jessica Kahn, a partner at McKinsey & Co. and a former federal Medicaid official, has urged states to start adapting their systems immediately. “Time is a-wasting already,” she said during a recent Medicaid advisory panel hearing, as reported by The Associated Press.
The process for determining medical frailty varies widely across states. In Arkansas, applicants can indicate on their forms if they’re disabled, blind, or need help with daily living, with about 6% of Medicaid expansion enrollees qualifying as medically frail. West Virginia allows self-reporting, while North Dakota requires detailed documentation, and more than half of applicants are denied, according to state officials cited by The Associated Press. The lack of a clear, uniform definition from federal regulators only adds to the confusion. Federal officials have promised to clarify the term “medically frail” in 2026, but for now, states are left to make their own calls—potentially leaving many at risk of losing coverage due to bureaucratic hurdles.
Advocacy groups, including the Medicaid Health Plans of America and the Association for Community Affiliated Plans, have lobbied for a more lenient approach, urging that enrollees be allowed to self-attest to their medical frailty. They argue that successfully implementing these exemptions will be “crucial” to avoid severe health risks for vulnerable populations.
The administrative burdens will fall heavily on states and, in many cases, on county governments. In California, counties may be tasked with building out the verification systems required to comply with the federal mandate—a costly and complex endeavor for already cash-strapped local governments, according to LAist.
The ripple effects could be devastating for the broader health care system. Safety-net hospitals, which already operate on thin margins, could face financial collapse as more uninsured patients turn to emergency rooms for care they can’t get elsewhere. “That burden ends up falling on a lot of hospitals, like safety-net facilities,” Orbach-Mandel told LAist. Some hospitals in California have already discussed discontinuing services or even closure due to rising unreimbursed costs.
For individuals like Eliza Brader, the new rules threaten to compound existing hardships. Brader, who was once kicked off Indiana Medicaid for failing to meet work requirements (her work-study job didn’t count), dreads the prospect of more red tape. “Anytime I have tried to receive help from the state of Indiana, it has been a bureaucratic nightmare,” she said to The Associated Press.
As the countdown to 2027 continues, the future of Medicaid hangs in the balance—caught between competing visions of government responsibility, fiscal restraint, and the everyday realities faced by millions who depend on the program for their health and well-being. The coming years will test not only the resilience of state agencies and the ingenuity of policymakers, but also the resolve of a nation grappling with what it means to care for its most vulnerable citizens.
