An analysis published March 17 by the Urban Institute by the Urban Institute and the Robert Wood Johnson Foundation warns that up to 5 million adults could lose their Medicaid coverage by 2026 — not because they fail to meet work criteria, but due to bureaucratic hurdles and reporting challenges.
With hospitals and health systems already grappling with financial pressures, this policy shift could further strain emergency departments, disrupt continuity of care and exacerbate health disparities, particularly in rural and underserved communities.
“Work requirements are a blunt tool that creates costly administrative red tape and separates eligible people from health coverage they rightfully qualify for,” Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, said in a news release. “Nearly all adults who gained coverage through Medicaid expansion already meet work requirements. People would not lose healthcare coverage because they are ineligible. They would lose coverage because of the bureaucratic burden the program would put on people across the country.”
Seven key takeaways from the report:
1. Researchers project that between 4.6 million and 5.2 million adults will lose Medicaid in 2026 if Congress enacts work requirements for Medicaid expansion enrollees.
“Even if work requirements are limited to expansion adults and states use available data to try to automatically identify those who are exempt or compliant, millions of Medicaid enrollees would lose coverage,” Michael Karpman, principal research associate at the Urban Institute, said. “Most of these adults would become uninsured and lose access to essential healthcare, including substance use disorder and mental health treatment, medications needed to manage chronic health conditions, and treatment for life-threatening illnesses such as cancer.”
2. According to researchers, more than 9 in 10 adults with Medicaid expansion coverage:
- Work some or all months of the year;
- Are parents or caregivers for dependent children under 18;
- Attend school;
- Care for a disabled household member;
- Are in fair or poor health or have a functional limitation;
- Are looking for a job;
Other adults may be pregnant, have physical or behavioral health conditions, care for someone outside their household, participate in job training or community service, or possess other unobservable attributes in the Urban Institute’s data that could exempt them from work requirements.
3. The Limit, Save, Grow Act, a 2023 bill that may inform 2025 discussions, proposed requiring adults aged 19-55 to report at least 80 hours per month of work or related activities to maintain coverage.
3. Coverage loss, which is expected to result from bureaucratic barriers rather than actual ineligibility, could lead to reduced access to mental health treatment, chronic disease management and life-saving care, according to the report.
4. Historical data from Arkansas and New Hampshire, which briefly implemented work requirements, shows that 72% to 82% of enrollees lost coverage due to reporting issues, not failure to meet work criteria, according to researchers. Confusion, lack of awareness, and reporting difficulties — not ineligibility — were the primary reasons for Medicaid disenrollment in these states.
5. States’ ability to mitigate coverage loss depends on their exemption processes, but not all states may implement strong data-matching systems to automatically verify compliance.
6. Many affected individuals would become uninsured, increasing the burden on hospitals through uncompensated care costs. Hospitals, especially those in rural and underserved areas, could see higher emergency room visits and increased demand for charity care.
7. Patients with chronic conditions, such as diabetes, heart disease or behavioral health disorders, could experience worsened health outcomes due to interrupted care and medication access. The policy could lead to reduced access to substance use disorder treatment at a time when opioid overdoses remain a national crisis.
Click here to access the report.
