Millions of Medicaid beneficiaries may find a way to evade the recently implemented federal work requirements under President Trump’s new domestic policy law—provided they reside in counties experiencing high unemployment rates.
Set to take effect by January 2027, this sweeping legislation mandates that many adult, nondisabled Medicaid recipients in 42 states and Washington, D.C., must either work or volunteer for 80 hours each month, or engage in educational pursuits. However, an exemption exists for those living in counties where unemployment exceeds 8% or is 1.5 times the national unemployment rate, should their state apply for such an exemption.
A recent analysis by KFF reveals that this exemption could offer relief to millions of Americans who are caught in a challenging predicament: the necessity to work for health insurance while struggling to find employment. The Congressional Budget Office (CBO) has projected that this work requirement could affect approximately 18.5 million Medicaid enrollees, with an estimated 5.3 million losing their health coverage by 2034. CBO spokesperson Caitlin Emma confirmed that analysts have factored in the unemployment rate exemptions in their estimates. Notably, only states that expanded Medicaid through the Affordable Care Act (ACA) or obtained a special waiver are obligated to implement these work requirements.
The number of individuals who could qualify for an exemption largely hinges on how the Trump administration interprets the law and whether state officials choose to apply. For instance, if the administration allows exemptions for counties where the unemployment rate has surpassed the specified thresholds for any month within a 12-month span, an estimated 4.6 million Medicaid recipients in 386 counties might qualify for an exemption based on the latest unemployment statistics from KFF, a health information nonprofit organization.
This figure represents just under a quarter of all Medicaid enrollees subject to the work requirement. Jennifer Tolbert, a co-author of the analysis and deputy director of KFF’s Program on Medicaid and the Uninsured, noted that under this one-month threshold, “the impact could be fairly significant.”
However, Tolbert expressed concern that the Trump administration is likely to adopt a more stringent standard based on average unemployment over a 12-month period, aligning it with the work requirements under the Supplemental Nutrition Assistance Program (SNAP), commonly referred to as food stamps. Under this stricter criterion, only about 1.4 million Medicaid enrollees residing in 158 counties could qualify for an exemption, which amounts to roughly 7% of those subject to the work requirements. Notably, about 90% of those who might be exempted under this 12-month standard reside in only five states: California, New York, Michigan, Kentucky, and Ohio, with California alone accounting for more than half of the potential exemptions.
The unemployment rate exemption is one of several carve-outs from the Medicaid work requirement established by the GOP’s legislation. Other exemptions include parents with children under 14, individuals who are disabled or frail, and those who are pregnant, incarcerated, or undergoing treatment for substance use disorders. The high unemployment provision stands out as it encompasses entire counties in its exemption criteria.
Despite the potential for these exemptions, concerns linger regarding whether state officials in Republican-led regions will choose to apply for them, given previous hesitance in seeking exemptions under SNAP. As of 2023, 18 states had not pursued an exemption for SNAP, even though many residents might qualify.
“It’s not a guarantee that people can rely on,” warned Emily Beauregard, executive director of Kentucky Voices for Health, a nonprofit advocating for health access. Eastern Kentucky, in particular, is home to several counties with persistently high unemployment rates.
In support of Trump’s legislation, many Republicans in Congress have argued that individuals who gained Medicaid benefits through the ACA ought to seek employment to reduce their reliance on government assistance. However, experiences in states like Georgia and Arkansas have illustrated that Medicaid work requirements can be costly to implement and confusing for enrollees. In Arkansas, nearly 18,000 individuals—approximately a quarter of the state’s adults who received Medicaid through the ACA expansion—lost their coverage when a work requirement was in effect between 2018 and 2019. Ultimately, a court intervened to terminate the state’s work requirement program.
Critics highlight that the majority of Medicaid enrollees are already employed, have disabilities, or bear caregiving responsibilities, arguing that the additional reporting requirements merely serve as bureaucratic hurdles to maintaining health coverage. Under the new law, enrollees must verify their work status at least twice annually.
Most coverage losses attributable to work requirements occur among individuals who are already working or should be exempt but lose their coverage due to bureaucratic complications.
It’s essential to note that not all states are required to implement work requirements under Trump’s legislation; only those that opted to expand Medicaid under the ACA or through federal waivers are subject to these new rules. The ACA has infused hundreds of billions of federal dollars into states, enabling them to cover individuals earning up to 138% of the federal poverty level, which is projected to be $21,597 for an individual in 2025. Forty states and Washington, D.C., have embraced this expansion, while Georgia and Wisconsin have only partially expanded Medicaid through federal waivers and are thus included in the list of states subject to work requirements.
Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities, a progressive think tank, expressed some optimism about the law’s provisions for counties with high unemployment, stating they could mitigate the number of individuals losing their health coverage due to the work requirements.
Yet, she conveyed concerns that the Trump administration might create barriers that would complicate the exemption process for counties. “I’m glad it’s in there as it will certainly help people, but it’s still a terrible bill,” she reflected. “This will not really blunt the harm of the bill.”
