Medicaid Work Requirements Start January 1, 2027: What Health Centers Need to Do Now
On January 1, 2027, most adults covered through Medicaid expansion will have to show 80 hours a month of work or another qualifying activity to keep their coverage. A handful of states have already started.
This is not a cut to payment rates, and it does not touch a health center’s PPS rate. What changes is who stays enrolled and how often they have to prove it. For health centers, the real risk is patients who still qualify losing coverage over paperwork.
What the law requires
The requirement comes from section 71119 of the 2025 reconciliation law (Public Law 119-21), signed July 4, 2025. CMS calls it the community engagement requirement and set out the details in an interim final rule published June 3, 2026.
Who it covers. Adults ages 19 to 64 in the Medicaid expansion group, or in certain waiver populations, who are not pregnant and not enrolled in Medicare. CMS says 43 states and the District of Columbia cover these adults: the expansion states plus waiver populations in states such as Georgia, Tennessee and Wisconsin.
What counts. Any one of these in a month meets the requirement:
- 80 hours of work
- 80 hours of community service through a public or nonprofit program
- 80 hours in a work program
- Enrollment in school at least half time
- Any combination of the above that adds up to 80 hours
- Monthly income of at least 80 times the federal minimum wage, which is $580 in 2026
Seasonal workers can average their income over the previous six months.
When it starts, and why December matters
States have to start no later than January 1, 2027, and they can start earlier. According to KFF’s tracker, Nebraska started May 1, 2026, Montana July 1, 2026, and Iowa starts December 1, 2026.
At application, each state looks back one to three consecutive months before the application month. Most states chose one month. That means a patient who applies in January 2027 can be judged on what they did in December 2026.
At renewal, states check again, and they can check more often. Indiana and New Hampshire plan quarterly checks.
CMS can give a state more time on a case-by-case basis if the state shows a good-faith effort. Those extensions run up to six months at a time and can never go past December 31, 2028. As of late October 2026, no state had been publicly reported as receiving one.
How verification works
States have to use data they already have before asking the patient for anything. Until January 1, 2028, they can accept a patient’s own statement, signed under penalty of perjury. After that, they need documentation where it is reasonably available.
When a state can’t confirm compliance, it sends a notice. The patient then has 30 calendar days to show they meet the requirement, and their coverage continues during those 30 days. If they don’t respond, the state can deny or end coverage, with fair hearing rights.
Who is exempt
Many people in the expansion group won’t have to report hours at all. The law excludes, among others:
- People who are pregnant or postpartum
- Parents and caregivers of a child 13 or under, or of a person with a disability
- People who are medically frail, including people with a substance use disorder or a disabling mental disorder
- American Indians and Alaska Natives
- Former foster youth under 26
- Veterans with a total disability rating
- People in drug or alcohol treatment
We cover the exemptions, and how health centers can help patients document them, in a follow-up post.
What it means for health centers
Early data points in one direction. In Nebraska, the first state to start, KFF found that 57% of the adults up for renewal qualified for an exclusion. Of the 7% who lost coverage at renewal, 92% had not responded to the state’s requests.
In other words, most coverage loss came from people not answering, not from people failing the test. That is a problem a health center can do something about.
The Congressional Budget Office estimates the requirement will add 5.3 million people to the uninsured in 2034, assuming states start between 2027 and 2029. Estimates for any one state depend heavily on how that state runs it.
Expansion adults will also renew every six months instead of every twelve, starting with renewals scheduled on or after January 1, 2027. That doubles the number of times each patient has to get the paperwork right.
What health centers can do now
- Find your expansion adults. Pull a list of patients covered through the adult expansion group, and keep it current.
- Update contact information at every visit. States send notices by mail or electronically. A wrong address is how an eligible patient misses a 30-day window.
- Learn your state’s rules. Your state Medicaid agency and your Primary Care Association can tell you the start date, the look-back period, which exemptions apply and what documentation the state accepts.
- Code diagnoses completely. States are told to look first at claims and encounter data from the past 12 months to identify people who are medically frail. The diagnoses on your claims matter.
- Check coverage at check-in. NACHC’s quick guide recommends checking eligibility at every visit and helping patients document hours or submit attestations.
- Ask your managed care plans for enrollment and termination lists. Plans can’t decide who complies, but they can help with outreach and data.
- Work with your Primary Care Association. Most are building shared materials and tracking state decisions.
Where Droxi fits
Droxi doesn’t verify Medicaid eligibility. What we do is take routine inbox work off your clinical team, so providers and nurses have more time for patients during a stretch like this one. Droxi Unbox gives back 5.1+ hours per provider, every week, and we’re happy to show you how it works inside athenaOne or eClinicalWorks.
Frequently asked questions
When do Medicaid work requirements start?
No later than January 1, 2027. States can start earlier, and Nebraska, Montana and Iowa already have or will in 2026. CMS can grant a state more time case by case, but never past December 31, 2028.
Who has to meet the Medicaid work requirement?
Adults ages 19 to 64 covered through Medicaid expansion or certain waiver programs, who are not pregnant and not on Medicare. Children, adults 65 and older, and people who are blind or disabled are not subject to it.
How many hours do patients need?
80 hours a month of work, community service or a work program, or a combination. Half-time school enrollment or monthly income of at least $580 also counts.
Does this cut health center payment rates?
No. It changes who stays enrolled in Medicaid and how often they renew. It does not change Medicaid payment rates or a health center’s PPS rate.
What happens if a patient can’t show compliance?
The state sends a notice, and the patient has 30 days to respond while their coverage continues. If they don’t, the state can deny or end coverage, and the patient keeps the right to a fair hearing.
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