What Happened to Trump Administration's CMS Medicaid Work Rules?

During its tenure, the Trump administration initiated a significant shift in Medicaid policy by encouraging states to impose work and community engagement requirements as a condition for eligibility. In January 2018, the Centers for Medicare & Medicaid Services (CMS) issued guidance inviting states to apply for Section 1115 demonstration waivers to implement such rules, a departure from previous administrations. Over the next few years, CMS approved waivers with work requirements in 13 states, including Kentucky, Indiana, Arkansas, and New Hampshire. These policies typically required non-elderly, non-pregnant adults without disabilities to engage in work, job training, education, or community service for a specified number of hours per month, often 80 hours.

The implementation of these rules faced immediate and significant legal challenges. Federal courts, including the U.S. District Court for the District of Columbia and the D.C. Circuit Court of Appeals, repeatedly struck down approvals for states like Arkansas and Kentucky. The courts consistently ruled that the Trump administration's approvals were 'arbitrary and capricious' because they failed to consider the impact on coverage, which is the primary objective of the Medicaid program. Arkansas was the only state to fully implement its work requirements before they were halted by court order. During its nine months of operation from June 2018 to March 2019, over 18,000 people in Arkansas lost their Medicaid coverage, primarily due to administrative burdens and difficulties in reporting compliance, rather than an inability to meet the work hours.

Upon taking office in January 2021, the Biden administration swiftly moved to reverse these policies. President Biden issued an executive order directing a review of policies that might undermine Medicaid, and by February 2021, CMS began withdrawing all previously approved work requirement waivers, citing evidence of coverage loss and the impact of the COVID-19 pandemic. In April 2022, the Supreme Court dismissed pending appeals in cases challenging these waivers as moot, given the Biden administration's withdrawals. This action, while not ruling on the merits of work requirements, effectively ended the Trump-era waiver approach.

However, the landscape of Medicaid work requirements dramatically shifted again in July 2025 with the passage of the 'One Big Beautiful Bill Act' (OBBBA) by a Republican-led Congress. This legislation established the first federally mandated Medicaid work requirements, requiring states to implement a monthly 80-hour community engagement requirement for adults in the Affordable Care Act's Medicaid expansion group by January 1, 2027. Exemptions are included for populations such as pregnant women, individuals with disabilities, and caregivers of young children. States can apply for a delay until December 31, 2028.

As of June 2, 2026, the Centers for Medicare & Medicaid Services (CMS) released a long-anticipated interim final rule on June 1, 2026, providing detailed guidance for states on implementing these new federal mandates. This rule defines qualifying activities, outlines verification standards, and specifies exemptions, including a more restrictive definition of medical frailty than some states anticipated. The Congressional Budget Office (CBO) estimates that these new federal requirements could lead to millions of people losing Medicaid coverage, with projections ranging from 2.3 million in 2027 to over 3 million in subsequent years, and potentially up to 10.1 million fewer people in Medicaid expansion coverage by 2028 under low mitigation scenarios. While most Medicaid enrollees are already working or face barriers to employment, the new federal mandate represents a significant and ongoing policy shift.