Medicaid work rules are coming; a top researcher recommends actions to take now

This story was originally published by the Institute for Healthcare Policy & Innovation at the University of Michigan. 

With just over a year to go until low-income people covered by Medicaid expansion in 40 states must start verifying they’re working, or exempt from work requirements, a University of Michigan health care researcher says there isn’t a moment to waste.

Writing in the New England Journal of Medicine, John Z. Ayanian, M.D., M.P.P., lays out key actions that states, health care providers and organizations, community groups and researchers should take to keep people from losing Medicaid coverage if they actually qualify.

Ayanian heads the U-M Institute for Healthcare Policy and Innovation and its team evaluating the expansion of Medicaid in Michigan under the Healthy Michigan Plan.

Listen to Ayanian discuss this topic in a NEJM podcast

He wrote the new piece in response to the Medicaid-related components of the One Big Beautiful Bill Act, signed into law in July 2025. Most states will have to comply by January 2027.

For example, he writes:

• State agencies need to prepare systems that can automatically verify someone’s work status based on payroll and tax data, and their health status based on Medicaid records, to reduce the chance that someone will lose their coverage because they don’t or can’t submit proof that they’re doing one of the approved community engagement activities (working, studying, volunteering) or are unable to do so for medical or caregiving reasons.

• States also need to communicate clearly, through multiple channels and well in advance, about what individuals will need to do to keep their coverage, and how to get support.

  Doctors and clinics will need clear guidance from state Medicaid agencies on how to verify that someone’s health conditions are serious enough to prevent them from working, and thus enable them to keep their Medicaid health coverage if they aren’t working, studying, or volunteering at least 80 hours per month.

  “Many people who haven’t qualified as disabled through the Social Security Administration still face major health barriers to work, and their physicians and other providers need a pathway for determining and certifying they are medically ‘frail’ and should thus be exempt  from work requirements under the new law,” said Ayanian, a primary care physician at U-M Health and a professor of internal medicine at the U-M Medical School who holds joint appointments in the School of Public Health and Gerald R. Ford School of Public Policy.

• Health care organizations, from freestanding community clinics to major health care systems, need to prepare to support their patients who have significant medical needs, by helping them understand and comply with the law’s requirements.

• Researchers need to prepare now to evaluate the impacts of the work requirements to inform policymakers through objective evidence.

  This evaluation will be made harder, Ayanian says, because states are barred from conducting gold-standard randomized controlled studies of the impacts of work requirements, by randomly exempting some Medicaid participants and seeing how they fare compared with those subject to the requirements.

In his piece, Ayanian also lays out some key facts about Medicaid and its enrollees, including Census data about what percentage are already working even in the absence of work requirements (44% full time, 20% part time), and what percentage are caregiving (12%), attending school (7%), retired or unable to find work (8%) or too ill or disabled to work (10%).

To qualify for Medicaid in the 40 states and the District of Columbia that have expanded eligibility and are subject to the OBBBA’s work requirement rules, a person can make no more than 138% of the federal poverty level.

That’s about $21,600 a year for an individual, while a couple can make no more than $29,187 a year, and a family of four can have an income of no more than $44,367 a year.

That works out to a wage of about $10.40 an hour for someone working 40 hours a week every week of the year.

Learn more about U-M research on Medicaid, and the evaluation of the Healthy Michigan Plan. 

Listen to an audio interview with Ayanian.

Paper cited: "Protecting Medicaid Enrollees with Chronic Conditions amid Work Requirements," New England Journal of Medicine. DOI: 10.1056/NEJMp2508966