CMS lets states delay Medicaid coverage losses over work rule

The Centers for Medicare & Medicaid Services announced Friday that states can opt to keep Medicaid enrollees from losing coverage before July 2027 solely because they miss a federal work requirement.

The requirement still begins Jan. 1, 2027, but states can opt for a "hold harmless period" through June 30, 2027. Participating states will assess compliance and exclusions, but will not deny applications or disenroll otherwise eligible people solely because they do not meet the rule.

The administration says the requirement encourages work and reduces waste while safeguarding benefits for those in need. States can instead start removing people unable to prove compliance at the beginning of the year, and must notify the administration of their choice by Dec. 11, Politico reported.

"If the state can use data to show that someone is working or qualifies for an exclusion, that person should not have to track down paperwork to prove it," said Dan Brillman, the agency's deputy administrator and director of the Center for Medicaid and CHIP Services.

In correspondence with state officials obtained by Politico, agency leaders said feedback had raised "impediments to successful launches at scale, policy updates, operations, and overall readiness."

The White House declined to comment on the delay, NBC News reported.

Democrats sought a delay

The announcement followed a request Thursday for an immediate delay from Sen. Ron Wyden, D-Ore., and Rep. Frank Pallone Jr., D-N.J., the top Democrats on the Senate Finance and House Energy and Commerce committees. In their letter to CMS Administrator Mehmet Oz, they said states needed fully tested systems and beneficiary protections before denying or terminating coverage.

Sarah Lueck, vice president for health policy at the Center on Budget and Policy Priorities, wrote on X that "Today's news lets states delay the harm."

Millions of people's health care is at risk because of the Republican reconciliation law’s work requirement, as states scramble to implement on a rushed timeline & respond to shifting federal requirements. Today’s news lets states delay the harm.

— Sarah Lueck (@sarahL202) November 13, 2026

In October, five Democratic governors asked Health Secretary Robert F. Kennedy Jr. to postpone the requirements, saying state agencies were not ready.

Nebraska went first

Nebraska began applying the work requirement on May 1. State figures show that through August, more than 1,000 people there had lost coverage or been denied benefits because of it.

Preliminary figures presented to Nebraska's Medicaid Advisory Committee showed that more than 9 in 10 people subject to the rule qualified when their benefits came up for renewal in July and August.

Among the 533 people denied continued coverage, paperwork accounted for most losses. Forty-three lost coverage because they did not meet the requirement itself.

"There are likely people who are still eligible for coverage who lost it," Amy Behnke, CEO of the Health Care Center Association of Nebraska, told The Associated Press.

Kathy Hempstead of the Robert Wood Johnson Foundation told the AP that "there will be fewer people that lose their coverage due to administrative failures," although she said which states will use the extra time is unclear. Kate McEvoy, executive director of the National Association of Medicaid Directors, said state Medicaid leaders "appreciate the additional flexibility that CMS is providing."

Court fight over exemptions

In October, a federal court in Boston found the agency's definition of medically frail people exempt from the requirement too strict and barred the agency from enforcing that provision. Democratic-led states had sued over the regulation, arguing that it exceeded Congress' intent, The Hill reported.

Wyden and Pallone said Oz had stated the administration will appeal. The lawmakers said the invalidated standard was restrictive enough that a cancer diagnosis might not qualify.

Republicans established the requirement in the One Big Beautiful Bill Act in 2025. It covers Medicaid expansion enrollees, and the agency says some applicants and beneficiaries ages 19 to 64 are subject to it unless excluded.

The Congressional Budget Office estimated that the work requirements alone would result in 5.3 million additional uninsured people by 2034, while reducing federal spending by $317 billion.

Democrats won both chambers of Congress in last week's election, take control in January and have said they want to roll back the requirement. Wyden and Pallone said Thursday that repealing the law's Medicaid reductions, work rules among them, "will be a top priority of Democrats in the 120th Congress."