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The build-out under way
Under the 2025 budget law, adult Medicaid enrollees in 42 states and the District of Columbia will need to show 80 hours a month of work or a similar activity, unless exempt, starting next year. The Congressional Budget Office projected that 18.5 million adults would be subject to the rules. Other changes arrive sooner, including limits on eligibility for some immigrants in October and twice-yearly eligibility checks for adults by the end of 2026.
A KFF Health News review found that five states have committed at least $45.6 million combined to system changes so far. Iowa expects to pay Accenture about $20.3 million, and Illinois expects at least $12 million for Deloitte. The federal government generally covers 90% of the cost to build eligibility systems and 75% of ongoing operations. State eligibility systems have a history of errors that can cut off people who still qualify.
State estimates of coverage losses are significant: up to 360,000 people in Illinois, about 63,000 in Wisconsin and about 32,000 in Iowa. CBO estimated 5.3 million more uninsured by 2034 from the work requirements alone.
Pressure on the safety net
Community health centers will be among the first to feel it. A Commonwealth Fund study reported by KFF Health News projects that about 17,000 federally funded centers could lose $32 billion over five years. Medicaid covered about half of their 33 million patients in 2024, and the study estimates 5.6 million center patients will lose Medicaid over the next decade, mostly through paperwork problems. Some states move earlier; Nebraska starts its work requirement May 1.
When people lose coverage, their need for care continues. Hospitals can expect more self-pay visits and more pressure on emergency departments if clinic capacity shrinks.
What hospital leaders can do now
- Model payer mix by state timeline. Build scenarios using your state’s estimates and start dates.
- Engage the state agency. Ask how the new system will verify work hours and exemptions, and whether hospital data can support those checks.
- Expand enrollment support. Financial counselors can help patients document hours or exemptions before coverage lapses.
- Partner with health centers. Shared navigation and referral arrangements protect access for patients both organizations serve.
Archive entry for Apr 5, 2026, added Nov. 11, 2026.