Medicaid Work and Reporting Requirements Rule Deeply Flawed

Last week, the Medicare Rights Center submitted comments on the Medicaid Community Engagement final rule which implements policies from HR 1 that create barriers and red tape for people with expansion Medicaid. We strongly oppose these policy shifts. In our comments, we focused on enrollee impacts, including the medical frailty definition in the rule. We urged the Trump administration to revise it immediately and to give states more time to implement these administrative changes.

Expansion Medicaid

In states that have expanded Medicaid, adults 19–64 who are not eligible for Medicare and who have incomes at or below 138% of the federal poverty level can enroll in coverage. Since its creation via the Affordable Care Act (ACA), expansion Medicaid has been the target of many attempts at repeal or of additional administrative barriers.

Administrative Burden in HR 1

HR 1 created a new work and reporting requirement for individuals with expansion Medicaid. The law requires enrollees to show that they are working or doing other activities that count as work for the purposes of the law, including community service, education, or a work program. Those who do not fulfill their reporting obligations lose coverage even if they are working or completing the other activities.

HR 1 created a new work and reporting requirement for individuals with expansion Medicaid.

And most people are working or doing these other tasks. According to analysis from KFF, 92% of adults under 65 with Medicaid met one of the activity qualifications in 2023. The majority (64%) worked full- or part-time with the remainder not working due to caregiving responsibilities, illness or disability, or school attendance.

But past experience with work requirements in Arkansas’s Medicaid show that it’s usually the red tape that keeps people from successfully staying enrolled. A recent exploration of the effect of work requirements on increasing employment found “[t]he substantial body of research that examined Arkansas’s experience found that the policy led to substantial coverage losses but produced little or no measurable increase in employment.”

It’s usually the red tape that keeps people from successfully staying enrolled.

Nebraska chose to be the first state to implement HR 1’s eligibility restrictions and is already seeing people kicked out of Medicaid.

HR 1’s Exceptions

HR 1 creates categories of people who are not subject to the new work requirements, including parents of dependent children, caregivers, and disabled veterans. One such exclusion is for people who are “medically frail or otherwise ha[ve] special medical needs.”

The text of the statute gives some examples of medical frailty: people who are blind or disabled; with a substance use disorder; with a disabling mental disorder; with a physical, intellectual or developmental disability that significantly impairs their ability to perform one or more activities of daily living; or with a serious or complex medical condition.

The Trump administration limits the medical frailty definition by inserting a new requirement.

In its rule, the Trump administration limits the medical frailty definition by inserting a new requirement. For medical frailty or special medical needs to count, they must impair “an individual’s ability to engage in community engagement activities.”

This addition departs from the plain language of the statute, creating an arbitrary process for determining frailty that runs counter to congressional intent, as it would ultimately result in medically frail people not receiving the statutorily required exemption. In addition, it puts people with serious health conditions at risk if they can only work because they have Medicaid coverage.

People who are applying for Supplemental Security Income may be particularly at risk for losing out on coverage.

People who are applying for Supplemental Security Income (SSI) may be particularly at risk for losing out on coverage due to this definition change, as they may experience challenges trying to prove their eligibility for the medical frailty exclusion when applying for SSI.

Impact on People With Medicare

While people with Medicare are not directly targeted by this rule, we know from our experience that even individuals whose circumstances are not specifically affected by a law or procedural change can fall through the cracks and lose coverage when state Medicaid programs are made more complex or resources are diverted.

Independent analysts agree. For example, during the post-pandemic Medicaid unwinding, one study shows that nearly one in seven low-income beneficiaries dually eligible for Medicare and Medicaid lost Medicaid coverage for at least one month from April 2023 to September 2024, and fewer than one-third re-enrolled within six months despite the likelihood they were still eligible.

Burdens on the Medical System

The rule will also overburden providers and interfere with access to care. Medical and other providers will be called upon to make determinations about work ability that are beyond the scope of their licenses or expertise. This will unnecessarily clog the health system and take time and attention away from delivering needed health care, therapy, or other services.

The rule will also overburden providers and interfere with access to care.

This is on top of other coverage losses and Medicaid cuts through HR 1 that will raise uncompensated care costs as hospitals and other providers treat the uninsured, limit state payment and financing options, and intensify healthcare workforce shortages that already impact people’s access to care.

It Is Not Too Late to Reverse Course

The Trump administration can still revise its deeply flawed rule. Better still, Congress could put a halt to these damaging policies.