New research from the Urban Institute projects major coverage losses under OBBBA. The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, introduced mandatory work requirements for Medicaid expansion enrollees across 41 expansion states. A new analysis from the Urban Institute projects that these requirements could reduce enrollment by between 4.9 and 10.1 million people by 2028.
According to the Urban Institute’s findings, many who lose coverage will be people who are already working, exempt from the requirements, or facing health challenges that should qualify them for exemptions.
What OBBBA’s Medicaid Work Requirements Require
OBBBA mandates that adults ages 19 to 64 enrolled in Medicaid expansion programs must work, participate in work programs, attend school at least half-time, or engage in community service for at least 80 hours per month. Alternatively, they must have a monthly income equivalent to 80 hours of work at the federal minimum wage.
States must begin enforcing these requirements by January 1, 2027. Some states may implement earlier. The law provides exemptions for specific groups, including:
- Parents or guardians of children age 13 or younger.
- People who are medically frail or have special medical needs
- Pregnant individuals and those receiving postpartum care
- American Indians and Alaska Natives
- Veterans with total disability ratings
- Those participating in drug or alcohol treatment programs
- People recently released from incarceration.
Projected Coverage Losses: Three Implementation Scenarios
Because states have flexibility in how they implement work requirements, the Urban Institute modeled three scenarios based on the extent to which states automate data-matching to verify compliance and exemptions, how broadly they define exemptions such as medical frailty, and how many months of compliance they require.
High Mitigation Scenario
States use extensive automatic data-matching, impose minimum work effort requirements, define exemptions broadly, and require compliance for the shortest allowable periods. Under this scenario, Medicaid expansion enrollment would still decline by 4.9 million people (27 percent) in 2028.
Medium Mitigation Scenario
States use moderate automatic data-matching with some manual verification required. Enrollment would decline by 8.0 million people (43 percent).
Low Mitigation Scenario
States use limited automatic data-matching, require more documentation from enrollees, define exemptions narrowly, and require longer compliance periods. Enrollment would decline by 10.1 million people (55 percent).
Key Finding: The range between scenarios — 4.9 to 10.1 million people losing coverage — demonstrates that state implementation choices will determine whether millions of people retain access to health care. Work requirements themselves account for 3.0 to 7.0 million of these coverage losses.
Who Will Lose Coverage — Including Many Who Shouldn’t
One of the most troubling findings in the Urban Institute analysis is that coverage losses will affect many who are meeting work requirements or who qualify for exemptions but face barriers to proving it.
Working People Will Lose Coverage
Even under the high mitigation scenario, enrollment among working adults declines by 19 percent. Under low mitigation, 37 percent of working enrollees would lose coverage. Why? Some work irregular hours, while others cannot verify their work status through available state data systems. Additionally, many work less than 80 hours per month or earn less than the equivalent of 80 hours at the federal minimum wage.
Self-Employed Workers Face Even Higher Risks
Self-employed workers are particularly vulnerable because their income is difficult for states to verify automatically through wage databases. The analysis projects coverage losses of 30 percent under high mitigation and 73 percent under low mitigation for self-employed enrollees.
People with Health Conditions and Disabilities
Medical frailty exemptions should protect people with serious health conditions and disabilities from losing coverage. However, states may define these exemptions narrowly or struggle to identify eligible individuals through available data.
Projected coverage losses among vulnerable groups:
- Adults reporting a health condition that limits their ability to work: 16-62% coverage loss
- Adults with functional limitations: 17-58% coverage loss
- Adults in fair or poor health: 23-59% coverage loss
- Adults living with a disabled family member (potential caregivers): 19-52% coverage loss
Older Adults Ages 50-64
Adults between 50 and 64 face disproportionate coverage losses — between 30 and 65 percent — largely because they are less likely to be parents of young children (who would be automatically exempt) and are less likely to have employment automatically verified through state data systems. This age group also faces elevated health challenges that may not be captured by narrow medical frailty definitions.
Students and Caregivers
Students enrolled at least half-time should qualify for exemption. However, many states lack systems to automatically verify enrollment status. Coverage among students could decline by 21% even under high mitigation and 56% under low mitigation. Similarly, caregivers for disabled family members face coverage losses of 19 to 52 percent because caregiving status is difficult to verify automatically.
State-Level Variation and Implementation Challenges
Every state that expanded Medicaid under the Affordable Care Act will experience enrollment declines. However, the magnitude varies based on the characteristics of each state’s Medicaid expansion population and implementation.
Under the low mitigation scenario, enrollment would decline between 37 and 68%. Even under high mitigation, states would experience declines ranging from 18 to 33%.
States face multiple operational challenges in meeting the January 2027 implementation deadline:
- Building or upgrading data systems to automatically verify work status, school enrollment, medical frailty, and other exemption criteria
- Establishing data-sharing agreements with employers, educational institutions, SNAP agencies, and other potential data sources
- Creating user-friendly reporting interfaces for people who must manually verify compliance or exemptions
- Training eligibility workers on new processes and exemption criteria
- Developing outreach and communication strategies to help enrollees understand requirements
The scale of this undertaking, combined with the compressed timeline and limited federal funding ($400 million total), suggests that many states will struggle to implement robust mitigation strategies by the deadline.
The Critical Role of Medical Frailty Definitions
How states and CMS define “serious or complex medical conditions” for medical frailty exemptions will significantly affect coverage outcomes.
The Urban Institute analysis examined what would happen if states adopted a broader definition of medical frailty that includes chronic conditions identified in other federal programs as serious or complex, such as diabetes, asthma, COPD, hypertension, and arthritis.
Under this broader definition, overall coverage losses in the high mitigation scenario would decline from 4.9 million to 4.3 million. An additional 600,000 people with chronic conditions would be protected from losing access to the care they need to manage their health.
What Health Plans Need to Know
For health plans and managed care organizations that serve Medicaid populations, these projections have significant operational and financial implications:
- Premium billing volumes for Medicaid expansion members could decline by 27 to 55 percent by 2028
- Churn rates will increase as people cycle in and out of coverage, creating administrative complexity and unpredictability.
- Member populations will skew toward those who can more easily verify compliance, potentially changing risk profiles.
- Customer service volumes surge as members seek help understanding requirements and reporting compliance.
- Claims processing patterns will become less stable as coverage disruptions increase.
Health plans should also anticipate that many members who lose Medicaid expansion coverage will transition to marketplace plans or become uninsured. This impacts both Medicaid and individual market enrollment patterns.
The Path Forward: CMS Guidance and State Decisions
CMS is required to issue implementation guidance by June 2026. This guidance will need to address critical questions that remain unresolved:
- How will “serious or complex medical conditions” be defined for medical frailty exemptions?
- What data sources can and should states use for automatic verification?
- Will self-attestation be permitted for certain activities and characteristics?
- What documentation will be required when automatic verification is not possible?
- How will qualifying activities such as community service and part-time education be defined?
- What standards will states be required to meet to minimize inappropriate coverage losses?
The timing of this guidance is critical. States are already building systems to meet the January 2027 deadline. Delayed or unclear guidance could result in states implementing systems that fail to adequately protect coverage for eligible individuals.
CMS could also require states to track and report detailed enrollment and disenrollment data to identify when implementation is not working as intended and potentially pause implementation in states where coverage losses indicate systemic problems with compliance and exemption determinations.
The Human Cost of Coverage Loss
Behind these enrollment projections are real consequences for millions of people:
- Reduced access to prescription medications, primary care, and treatment for chronic conditions
- Increased financial burden from medical bills and debt
- Delayed or forgone care could lead to worse health outcomes
- Greater psychological distress and anxiety about health and financial security
- Potential worsening of health conditions that could ironically make it harder to maintain employment
Previous research from Arkansas, the only state to fully implement Medicaid work requirements in 2018, found that the policy reduced coverage without increasing employment. The same pattern emerged in Georgia’s Pathways program, which has enrolled fewer than 10 percent of its target population despite significant administrative investment.
What This Means for Health Care Stakeholders
The Urban Institute analysis indicates that Medicaid work requirements under OBBBA will result in substantial coverage losses regardless of implementation approach. The range between these scenarios demonstrates that state policy choices and administrative capabilities will determine whether millions retain access to coverage.
For health plans, state Medicaid agencies, providers, and other stakeholders, the implications extend beyond enrollment numbers. These policies will impact billing operations, customer service demands, care continuity, safety net providers, and ultimately the health and well-being of millions of working people and their families.
The months ahead will determine whether states can build systems robust enough to minimize coverage losses among those meeting requirements or who qualify for exemptions. Federal guidance from CMS, state implementation decisions, and ongoing monitoring will all play critical roles in the outcomes.
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