States Complain About High Price Tag Of Medicaid Work Requirements

Some U.S. states are complaining about the high cost of Medicaid work requirements, Politico reported on Sunday.

The Centers for Medicare & Medicaid Services (CMS) issued an interim final rule on Monday enacting a new statutory requirement for some adults enrolled in Medicaid to meet an 80-hours-per-month work requirement to continue eligibility for coverage. States must generally implement this requirement by Jan. 1, 2027, according to CMS.

State health departments have been shelling out additional resources to expand their workforce, cover overtime costs and upgrade outdated technology systems to verify which low-income residents meet certain requirements necessary to maintain their Medicaid eligibility, Politico reported. They are also creating new systems to determine which individuals can qualify for an exemption if they are deemed sick enough, according to the outlet.

Many Democratic state officials argue that work requirements unduly pressure their budgets at a time when they are grappling with declining tax revenues and federal funding reductions connected to President Donald Trump’s 2025 One Big Beautiful Bill Act, per Politico’s report. Democratic states often have higher tax burdens than Republican states, according to Yahoo Finance.

“I’m looking at the operational, I’m looking at the programmatic, and I’m looking at the fiscal challenges associated with the implementation of this bill, and it’s taking a significant amount of financial resources away from a system that people depend on,” Virginia Secretary of Health and Human Services Marvin B. Figueroa told Politico.

Even state Republicans who support the work requirement policy have conceded it is straining their budgets and resulting in substantial cuts in other areas such as healthcare and education, Politico reported.

“We don’t have a bunch of extra money to go around,” Republican Missouri Sen. Brad Hudson said, according to Politico. “We had to make cuts this year. We’re probably going to have to make cuts next year. And, after a while, you can get into cutting some things that are pretty close to what all of us agree are essential services.”

The work requirement policy was initially projected to lower federal Medicaid spending by $326 billion and cost 5.3 million individuals their Medicaid coverage, STAT News reported. Republicans maintain that work requirements are necessary to combat waste, fraud and abuse across the Medicaid program, and that they will only target “able-bodied” individuals capable of work according to The Hill.

The Trump administration announced in May that it is withholding $1.3 billion in Medicaid payments to California, alleging the state has not done enough to combat fraud.