CMS outlines new Medicaid work requirements, exemptions and $600M tech investment
New work requirements for Medicaid established as part of last year’s One Big Beautiful Bill Act are set to go into effect in 2027, and now the details are being finalized. The new rules will impact state Medicaid programs funded by the federal government.
All new barriers to Medicaid entry will go into place on Jan. 1, unless states decide to opt into them earlier. Broadly, the new requirements for Medicaid eligibility will impact all adults in the U.S. from age 19 to 34 who are not pregnant and deemed able-bodied to work.
There are exemptions, such as for individuals who are disabled, frail or otherwise unable to meet the requirements for a work order. The Centers for Medicare & Medicaid Services also confirmed those enrolled in college or trade school will also remain exempt from work requirements, assuming they are half-time students.
The new framework will also impact state reporting requirements to ensure compliance. CMS said on a call announcing the changes that it will also be supporting states with data technology advancements to make reporting simpler and to help them to be more efficient through improved data streams.
CMS Administrator Mehmet Oz, MD, confirmed that part of the initiative includes $600 million for health IT contractors supporting the rollout of the new Medicaid system.
Oz promised that CMS would enforce strict safeguards on these vendors upgrading legacy systems to ensure states “are not taken advantage of.”
"Governors want support on the tech side," he added. “That's why there's been so much effort made by CMS to be able to provide that support.”
Oz, the former host of “The Dr. Oz Show,” stated that the agency he’s now in charge of is aiming to cut down on fraud, waste and abuse while ensuring the Medicaid beneficiaries who need insurance can get access to the safety net system.
“We think, directionally, we’re appropriately going after problem areas and doing it in a way that’s compassionate, forgiving,” he said of the balance, “but we don’t want to be fools.”
New tech in place by 2028
Despite the new Medicaid work requirements going into effect at the beginning of 2027, CMS Director of the Center for Medicaid Dan Brillman said during the call that the agency aims to have the new data infrastructure in place by 2028.
Until then, previous protocols to appeal Medicaid denials will be in place. But by January 1, 2028, patients will have more transparency into their eligibility and be able to submit paperwork to meet requirements for coverage.
CMS said the dual goal is to meet the needs of patients who rely on Medicaid while also encouraging others to seek private health insurance options.
The threshold for denials and appeals stands at 30 days, with patients having an option to reapply if they lost coverage.
CMS said the new rules do not forbid states from developing their own rules for Medicaid, so long as they comply with the new federal requirements for work and work-related exemptions.
This is a developing story, given none of this goes into effect until 2027.
Medicaid programs nationwide saw reductions in funding tied to changes in provider taxes put in place by the One Big Beautiful Bill Act, signed into law by Trump in July 2025.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.