New Medicaid work rules go into effect no later than Jan. 1, 2027. Federal guidance outlines exemptions.

CMS announced exemption guidance for Medicaid's 
new work requirements.

As the "One Big Beautiful Bill" continues to remake American safety net programs, guidance from the Centers for Medicare & Medicaid Services, released earlier this week, outlines "how states should carry out the work rules, including who would be exempt," reports Berkeley Lovelace Jr. of NBC News.

While the federal government will require states to roll out the new Medicaid work rules no later than Jan. 1, 2027, until now, states didn't know who could be considered for exemptions. Lovelace explains, "Pregnant women, parents of young children, veterans with disabilities and several other groups will be exempt from Medicaid’s new work requirements," according to CMS rules. "States will have discretion to determine which medical conditions qualify for exemptions."

The work rules do not require recipients to work full-time; instead, most adult Medicaid recipients must "work, attend school or volunteer for at least 80 hours a month to keep their coverage," Lovelace reports.

CMS will also allow exemptions for individuals who are considered too "medically frail" to work. The guidance also allows exemptions for people with "conditions that significantly limit their ability to work, such as cancer or substance use disorder," NBC reports. "The guidance doesn’t include an exemption for people who are homeless."

Before this week's announcement, Medicaid supporters worried that enrollees would lose their coverage while trying to prove their eligibility for an exemption; however, the guidance allows for that possibility. Lovelace reports, "During the first year, people will be allowed to attest — on their Medicaid applications or renewal forms — that they qualify for one of the exemptions rather than provide documentation."

The main thrust behind the work rules is to get more Americans to work. The National Bureau of Economic Research, a nonpartisan research group, found that Americans are working fewer hours than they did in previous decades, NBC reports. "The officials argued that government benefits reduce incentives to seek employment."