Assessing Potential Coverage Losses among Medicaid Expansion Enrollees under a Federal Medicaid Work Requirement
By Michael Karpman, Jennifer M. Haley and Genevieve M. Kenney / March 17, 2025
We assess potential coverage losses under federal Medicaid work requirements for adults ages 19 to 55 enrolled in the Affordable Care Act’s Medicaid expansion. Our analysis draws on lessons from two states with prior work requirements for their expansion populations and the Limit, Save, Grow Act, a 2023 House bill informing current discussions, which would have withheld federal funding for expansion enrollees ages 19 to 55 who did not qualify for and obtain an exemption or participate in a work-related activity for at least 80 hours per month for three or more months in a calendar year.
WHY THIS MATTERS
Previous state demonstration projects found substantial coverage losses under Medicaid work requirements. In 2018, Arkansas terminated coverage for more than 18,000 expansion enrollees who had not been exempted from or reported to be in compliance with work requirements. In 2019, New Hampshire was on the verge of suspending coverage for about one-third of its expansion population before halting implementation.
Agencies in these states automatically exempted or deemed compliant half to two-thirds of enrollees subject to work requirements using available information. Most of those not identified automatically were disenrolled or slated to be disenrolled, even though survey data found nearly all enrollees subject to work requirements already worked or had exemption-related characteristics. In both states, enrollees faced barriers to meeting reporting requirements, including low understanding of the policy, confusion about state notices, and difficulties accessing and using reporting systems. Increases in the number of uninsured adults resulting from coverage loss under federal work requirements are expected to result in greater unmet needs for health care, rising medical debt, and worse health outcomes.
WHAT WE FOUND
We assess coverage losses that could result if work requirements modeled on the Limit, Save, Grow Act were fully implemented in 2026 for the projected 13.3 million Medicaid expansion adults ages 19 to 55 across 40 states and the District of Columbia and if implementation processes and reporting patterns are consistent with experiences in Arkansas and New Hampshire. Our findings are as follows:
Approximately 7 million adults, or 52 percent of the expansion population in the target age group in 2026, have at least one of the following characteristics—earnings above a specified threshold, being a parent living with a dependent child, or complying with Supplemental Nutrition Assistance Program work requirements—that states could use for providing automatic exemptions or determining compliance if they followed similar approaches as Arkansas and New Hampshire. If states could automatically exempt all these adults from reporting requirements, the remaining 6.3 million adults would either have to request an exemption based on other criteria or report sufficient work hours or other qualifying activities to maintain coverage.
Assuming reporting patterns among these 6.3 million adults follow those in Arkansas and New Hampshire (with 72 and 82 percent, respectively, not receiving an exemption or reporting sufficient work activities), between 4.6 and 5.2 million expansion adults ages 19 to 55 would lose eligibility for federal Medicaid funding in 2026 under implementation of work requirements nationally. Assuming states do not make up for this loss of federal funding by covering these adults exclusively with state funds, these adults would lose Medicaid coverage. The number of adults losing coverage would constitute 34 to 39 percent of all expansion enrollees in this age group.
More than 9 in 10 expansion adults ages 19 to 55 are either engaged in activities prescribed under the policy or could meet exemption criteria: 91 percent are working, in school, caregiving for a child or disabled household member, looking for work, or have health issues that may limit their employment opportunities.
Coverage loss would be considerably higher if new work requirements are not explicitly limited to the expansion population. In that case, in addition to the 13.3 million expansion adults, the 10.6 million adults in traditional nondisabled eligibility pathways and 6.1 million in disability-related pathways in this age group would also be subject to the requirement, and potential coverage losses would be well above the approximately 5 million projected.
Potential coverage losses also would be much higher if states do not use data sources to grant automatic exemptions or identify compliance as Arkansas and New Hampshire did; if a larger segment of the expansion group is subject to work requirements (for instance, up to age 64); or if exemptions are more limited than we model. In practice, coverage losses are likely to vary widely across states, especially if legislation lacks requirements for states to institute the automatic exemptions that Arkansas and New Hampshire implemented.
Overall, even if states use data matching to automatically exempt enrollees from reporting requirements like Arkansas and New Hampshire did, many Medicaid enrollees meant to be exempt or who are working or engaged in work-related activities would fall through the cracks and lose coverage.
HOW WE DID IT
We use baseline data from the Urban Institute’s Health Insurance Policy Simulation Model. Our analysis relies on assumptions about who would be subject to federal work requirements and qualify for automatic exemptions, including that requirements are limited to expansion enrollees ages 19 to 55 and that state data matching efforts and enrollee reporting of exemptions and work activities would correspond to patterns in Arkansas and New Hampshire. The potential coverage losses we project would vary under other conditions.
