Work Requirements – Impact on States
Disabled people and their families are among the millions of Americans going uninsured due to cost in 2026. Many of these people do not have alternative options for health coverage or care. Recent Kaiser Family Foundation Health News coverage shared the story of a family that recently cancelled their ACA Marketplace coverage following the end of enhanced premium tax credits:
Year after year, Ross and Rebecca Tobiassen saw their healthcare costs rise, having relied on the Affordable Care Act for federally subsidized health insurance since its start in 2014. Year after year, the couple in western North Carolina kept their coverage, believing the peace of mind was worth the cost. […] The Tobiassens decided to cancel their insurance when Rebecca saw the cost of their monthly premiums would jump from $130 to more than $550. […]
The couple own and are the only employees of a small auto shop just west of Appalachian State University in the North Carolina mountains. Rebecca worries about her husband, whose work as a mechanic can be dangerous. A spring once shot a metal ball joint into their garage wall like a gun. A heavy object crushed Ross’ thumb. In 2020, Ross became mostly blind in one eye after repeatedly getting metal shards in it and developing an infection in his cornea.
Families like the Tobiassen’s are continuing to work, even without the protection of health coverage. For people like Ross Tobiassen, who is working with a disability, applying for Medicaid as an alternative would force him to complete burdensome work requirements paperwork each month, and potentially limit his income. Some disabled people have the option to buy into Medicaid in their state, but this isn’t available in all states. The premiums may not be affordable for all individuals. Working people with disabilities are making impossible choices in this environment to balance their budgets.
Medicaid Work Requirements – Compliance Burden on States
In our last newsletter, we shared about the interim final rule on Medicaid work requirements. This rule will hinder people with disabilities from accessing healthcare, whether working or not. The long-awaited “Medical Frailty” definition to file for an exemption from work requirements equates “frailty” with inability to work. This determination raises issues for states as they try to comply with the rule.
Under HR1, states are mandated to launch Medicaid work requirements starting January 1, 2027. As states have waited months for guidance on how to implement work requirements, a number have implemented more restrictive rules already. States like Indiana and New Hampshire are conducting quarterly compliance checks for enrollees. They join Arkansas and Idaho in rolling out a slate of more restrictive compliance verification processes.
Three other states are launching their requirements ahead of the January 2027 deadline (Iowa, Montana, and Nebraska). Amidst these changes, states have been looking to automation tools and AI to verify work requirements or make exemption determinations. A KFF report from late May outlined methods that states might have used to meet requirements, relying on claims data and programmatic data, like participation in HCBS. Unfortunately, states will not be able to simply exempt individuals with certain medical conditions or diagnoses from compliance with the work requirements. There is not a clear, universal pathway for proving someone’s inability to work. Individuals also need insurance in order to access ongoing health provider consultation in order to receive diagnoses that prove their “medical frailty”.
People with disabilities seeking an exemption from the work requirements can self-attest to their eligibility through 2027. However, starting in 2028, all individuals seeking an exemption will need documentation to justify their claims. The fast turnaround for states to create systems that can streamline these assessments poses a challenge. Caregivers who support family members with disabilities may also struggle to comply with the work requirement reporting, unless a clear verification process can be implemented. Family members should be exempt from work requirements, but guidelines remain unclear. All of these processes will place a demand on state resources and budgets as they try to comply with the final guidance.
Read more comments from our partners working for the health of people with disabilities:
- Center on Budget and Policy Priorities (CBPP)
- National Alliance for Direct Support Professionals (NADSP)
- Families USA
- National Association of State Directors of Developmental Disabilities Services (NASDDDS)
- Center for Children and Families, Georgetown University
Individual advocates and organizations are encouraged to share a public comment on these proposed rules through July 31, 2026. Submit your comment through the Federal Register. Advocates should also be aware of the recent Department of Justice memo which points to the erosion of HCBS support under this federal administration, which had been affirmed under the Olmstead Supreme Court decision in 1999. Read our statement to learn more about how Medicaid might be impacted by this development.
The NDNRC Newsletter is published biweekly through the summer. Archives of our weekly updates are available on the NDNRC website. Follow AAHD’s other newsletters to stay current on research opportunities and policy developments supporting people with disabilities. This newsletter is supported by the American Association on Health and Disability (AAHD). Sign up to become an AAHD member today to support ongoing projects like this.