Medicaid Work Requirements Hit July 1 in Montana While 5.3 Million Face Coverage Loss Nationwide

Update, June 3, 2026: The Centers for Medicare & Medicaid Services issued final regulations on June 1 that Kinda Serafi, a partner at Manatt Health, described as a “significant policy pivot” from what states had expected. States that spent months building eligibility computer systems to handle exemptions will need to scrap that work less than seven months before enforcement begins, according to KFF Health News.

The regulations require states to assess “the severity of an individual’s condition” rather than its presence alone, and limit the medical frailty exemption to five categories with no state additions permitted. Nebraska, which launched its work requirement on May 1 and had already published a nearly 300-page list of qualifying conditions, must now revise how it evaluates enrollees while coverage terminations for current participants are already scheduled this summer.

Starting in 2028, CMS will end self-attestation for medical frailty claims and require documentation, a standard more than two dozen states had not planned for, according to KFF Health News. Daniel Meuse, deputy director of Princeton University’s State Health and Value Strategies program, said states “will have to undo work that they did” to align with the new federal rules.

Update, June 5, 2026: The Centers for Medicare and Medicaid Services released an interim final rule on Medicaid work requirements that tightens eligibility standards beyond the One Big Beautiful Bill’s statutory language. Enrollees with diagnosed conditions such as sickle cell disease must now demonstrate they are “greatly impaired” from working, eliminating the automatic medical frailty exemptions that Nebraska had preserved when it implemented requirements voluntarily eight months ahead of the federal deadline.

Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities, told Mother Jones that state officials were not informed of the new medical frailty definition during federal-state discussions. Wagner attributed the stricter standard to the White House and said states will not be able to implement the requirements accurately by the January 1, 2027 deadline for all Medicaid expansion states.

The Urban Institute projects between 4.9 million and 10.1 million fewer people enrolled in Medicaid by 2028, with the interim final rule likely pushing the outcome toward the high end of that range. Maria Town, president and CEO of the American Association of People with Disabilities, noted that Medicaid-supported employment for disabled people does not qualify as “community engagement” under the rule. A 60-day public comment period is open before the rule is finalized.

Update, June 12, 2026: The Centers for Medicare & Medicaid Services released final rules on June 1 establishing how states must verify Medicaid work requirements under the One Big Beautiful Bill Act. The rules cover roughly 18.5 million enrollees in the Medicaid expansion population, with most states required to begin enforcement by January 1, 2027, per KFF Health News.

Nebraska began enforcement in May. Montana will start in July but has set October as the date when it will begin terminating coverage. Arkansas will also launch in July but will not impose penalties until 2027.

Enrollees may self-attest to qualifying work hours or medical inability to work in 2027, but states will require documentation starting in 2028. The final rules leave the definition of “medically frail” to each state individually, a standard the National Organization for Rare Disorders said could produce different eligibility outcomes across state lines. States also face financial penalties for incorrectly granting exemptions, which KFF researcher Jennifer Tolbert said may cause states to terminate coverage for people who still qualify.