Medicaid Work Requirements Could Lead to Major Coverage Losses Across Expansion States in the U.S.

Hundreds of thousands to millions of people across all four U.S. regions who are already working, participating in work-related activities or qualifying for exemptions could potentially lose Medicaid coverage in 2026 due to low awareness and confusion about the proposed federal work requirement, according to the newest analysis by the Urban Institute, supported by the Robert Wood Johnson Foundation.

The analysis from the Urban Institute breaks down projected coverage losses across the 40 Medicaid expansion states, where researchers based their estimates on previous work requirement rollouts in Arkansas and New Hampshire.

It’s estimated that the Northeast could see between 1.3 and 1.4 million people lose coverage, while the South may face 790,000 to 899,000 losses. The West is projected to have the highest number of losses, between 1.7 and 2 million, and the Midwest is expected to be hit with 794,000 to 904,000.

Coverage losses would be most severe in large-population states, according to the analysis.

For instance, California could lose between 1 and 1.2 million enrollees, and New York between 743,000 and 846,000. Thirteen other states—including Arizona, Illinois, Indiana, Kentucky, Louisiana, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania and Washington—could each see losses surpassing 100,000.

The analysis found that nearly every expansion state could see at least 10,000 adults lose coverage.

Researchers project that 4.6 to 5.2 million of the 13.3 million Medicaid expansion enrollees aged 19 to 55 would lose coverage—even though more than 90% of them already work, attend school, care for family members or have health issues that could exempt them from the requirements.

Most losses would stem from confusion about the policy and problems with navigating complicated reporting systems, the analysis claimed.

In February 2025, Congress introduced this bill under the new administration to require most Medicaid recipients aged 18 to 65 to work or volunteer at least 20 hours per week to remain eligible.

The bill applies to those who don’t qualify for an exemption due to medical issues, family responsibilities or other qualifying reasons.

These proposed changes are part of a larger effort to cut Medicaid spending by up to $880 billion over the next 10 years to help pay for extended tax cuts, including ending income taxes on tips and Social Security.

Although 13 states received federal approval to implement work requirements in 2018 under the first attempt to set work requirements for Medicaid consumers, only Arkansas fully rolled out the policy.

This resulted in more than 18,000 people losing coverage without any significant boost in employment, according to a KFF analysis.

The Congressional Budget Office (CBO) also found that national work requirements would cut spending and reduce enrollment but not increase employment.

However, Georgia’s limited work requirement program has cost over $40 million and has enrolled far fewer participants than expected, the KFF analysis found.

Reports have also shown that Medicaid can benefit folks by leading to a healthier lifestyle and keeping their jobs, especially those in physically demanding or low-wage work.

In addition, Medicaid supports mental health and addiction treatment, which are crucial for consistent employment, according to a report by the CBO in 2018 when this bill was first introduced.

Despite these findings, some states are pushing forward.

The Indiana House recently approved Medicaid work requirements this month, pending federal approval.

It was reported that Ohio became the first state under the second Trump administration to request authority to enact work requirements on its Medicaid expansion group.

After the state’s first request was overturned in 2021 by the Biden administration, Ohio Gov. Mike DeWine defended the policy in a letter addressed to HHS Secretary Robert F. Kennedy Jr. in March 2025.

“We have a new opportunity with this waiver to promote economic stability and financial independence for a vulnerable population of Ohioans,” DeWine said in the letter, adding that the request will “restore the dignity of work while at the same time improving health outcomes for Ohioans.”

Others, including Leanne Berge, J.D., CEO of Community Health Plan of Washington, a not-for-profit health plan headquartered in Seattle that has nearly 350,000 members, 290,000 of whom are covered by Medicaid, disagree.

“It's bad health policy, and it's not something that we would support,” Berge told Managed Healthcare Executive in a previous interview. “But at the same time, if it means less loss of funding and less loss of eligible enrollees…we would fight that less than we would fight something that has greater impact.”

Urban Institute researchers also noted that coverage losses are not about people refusing to work.

They stressed that many enrollees will be harmed because of poor communication and hard-to-navigate systems.

Coverage losses could vary widely depending on how each state implements the requirements, the design of the law and any guidance by CMS.

Michael Karpman, principal research associate at the Urban Institute, reflected on those who could be affected by these losses by stating it “would result in greater unmet needs for healthcare, rising medical debt, and worse health outcomes.”

Katherine Hempstead, senior policy advisor at the Robert Wood Johnson Foundation, also added that the work requirements are an “ineffective solution to a nonexistent problem.”

“Restricting access to Medicaid through work requirements jeopardizes health for millions of people and places a massive burden on states, which would be forced to administer these incredibly complex regulations with increasingly tight budgets and limited staff,” Hempstead said.