Under the One Big Beautiful Bill Act signed by President Trump last July, millions of people who apply for Medicaid will have to prove they’ve been working, going to school, or volunteering for at least a month before gaining or retaining coverage. The law gives states the choice of requiring one, two, or three months of work history, and the nonpartisan Congressional Budget Office estimated 18.5 million adults will be subject to the new rules across 42 states and D.C. Some Republican-led states are pushing well beyond the federal floor:
- Indiana became the first state to set the requirement at three months, the maximum allowed, when Governor Mike Braun signed the bill into law on March 4,
- Idaho followed with its own three-month requirement signed on April 10.
- Missouri, Arizona, and Kentucky are also moving to restrict state-level flexibility in implementing the rules.
Advocates and healthcare providers are raising significant concerns about who will bear the burden of these requirements. Nearly two-thirds of adults ages 19 to 64 on Medicaid already work, according to KFF, and the reason most non-working adults are on Medicaid is that they are retired, serving as a caregiver, or too sick. Missouri lawmakers are seeking a constitutional amendment to bar their state from offering optional “short-term hardship” exemptions, which patient advocates say would particularly harm rural cancer patients who must travel to urban centers for treatment, disrupting their ability to work.
Impact on Hospitals and Health Systems: Direct and significant financial implications for hospitals, especially safety-net facilities and rural providers. Indiana’s Medicaid enrollment is expected to decrease because of the state’s three-month requirement, according to an analysis from Indiana’s nonpartisan Legislative Services Agency. This translates directly into higher uncompensated care costs at a time when DSH and uncompensated care payments from CMS are already proposed to decrease.
For OB-GYN practices, community health clinics, oncology programs, and rural hospitals in particular, the downstream enrollment losses could be severe. Health systems in states adopting stricter rules will need to invest heavily in patient navigation and eligibility assistance programs to prevent coverage lapses for their most vulnerable patient populations.