The U.S. Department of Health and Human Services (HHS), through its Centers for Medicare & Medicaid Services (CMS), announced on June 1 a new rule for Medicaid eligibility. The rule requires certain adult applicants and beneficiaries to complete at least 80 hours per month of work, education, job training, or community service in order to obtain or maintain Medicaid coverage. The rule is already in effect, while the government continues to solicit public comments.
The new regulation establishes a unified standard for states implementing these requirements, aiming to promote economic stability and strengthen individual self-sufficiency.
CMS Administrator Dr. Mehmet Oz said the “Working Families Tax Cuts Act” represents a historic reform of Medicaid, and the federal government is working closely with states to implement the changes.
“This rule helps Americans build skills and independence through work, education, job training, or community service, creating new opportunities for themselves and their families,” Oz said.
The rule, based on the Working Families Tax Cuts Act, provides a unified framework for states to implement new community engagement requirements, including eligibility verification, exemption criteria, enforcement, and reporting rules. It was developed through extensive coordination with states and incorporates ongoing efforts to modernize eligibility systems, improve interactions between beneficiaries and state governments, and strengthen accountability mechanisms.
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Millions lifted out of poverty
A new study from the Office of the Assistant Secretary for Planning and Evaluation at HHS suggests that, due to increased employment opportunities and other factors, the requirement could help up to 2.9 million people move out of poverty.
Under the rule, some adults aged 19 to 64 will be required to demonstrate compliance with community engagement requirements. However, certain groups are exempt, including pregnant women, postpartum women, people with disabilities, medically frail individuals, and American Indians and Alaska Natives. Parents and caregivers of young children or disabled individuals, as well as those who already meet similar requirements under the Supplemental Nutrition Assistance Program (SNAP) or Temporary Assistance for Needy Families (TANF), may also be exempt.
The rule also requires states to submit data verifying applicant and beneficiary eligibility and to inform them of the new requirements to ensure proper implementation.
To support states, the federal government will provide funding, technical assistance, and collaboration with the private sector. Notably, the “Government Efficiency Grants” authorized under the Working Families Tax Cuts Act will allocate $200 million to help states upgrade systems and improve administrative capacity. In addition, private technology companies have pledged more than $600 million in support to help states modernize eligibility and enrollment systems and improve communication and outreach to Medicaid beneficiaries. These investments are part of a broader federal modernization effort, including expanded use of automation, data integration, and real-time verification technologies to improve efficiency, strengthen oversight, and enhance beneficiary experience.
Under the rule, applicable states must implement the community engagement requirement by Jan. 1, 2027 at the latest. However, some states, such as Nebraska, have already begun implementation, while others are considering early adoption.
The rule was issued as an “interim final rule with request for comments,” meaning it takes effect immediately while still allowing for public feedback, in line with the implementation timeline of the Working Families Tax Cuts Act and ensuring timely rollout while continuing to gather and assess public input.
