Millions of Young Adults Could Lose Medicaid Because of New Work Requirements: Urban Institute

A social policy think tank said up to 2.3 million young adults could lose Medicaid if they fail to meet new work requirements.

The requirements and frequent eligibility checks could reduce enrollment among adults aged 19 to 24 in expanded Medicaid by up to 48 percent, depending on how states implement it, according to an analysis published by The Urban Institute on Sept. 14.

The new provisions were passed in the One Big Beautiful Bill Act in 2025. They take effect on Jan. 1, 2027. Expanded Medicaid, which allows participating states to offer Medicaid to people earning up to 138 percent of the federal poverty level, took effect in 2014 under the Affordable Care Act.

An expanded Medicaid enrollee must work or volunteer for at least 80 hours per month or be a half-time student, unless he or she qualifies for an exemption. Exemptions include being medically frail, the parent of children under 14, or a caregiver for a disabled person.

Enrollees can self-attest to an exemption from work requirements when they renew their Medicaid eligibility, once every six months, through 2027. Beginning in 2028, self-attestation will be limited to once per year. After that, states must verify the exemption using health data from the preceding 12 months for the renewal.

Young adults may struggle to meet eligibility requirements because of high residential mobility; they move more frequently than other adults, and states may struggle to capture their school attendance and gig work, the think tank said.

The Urban Institute said 88 percent of young adults could be compliant with or exempt from work requirements, but because states may lack data to verify eligibility automatically, young adults may have to report their activities and provide additional documentation to remain covered.

It said it is also unclear what documentation states need to satisfy the requirement through a combination of school attendance and work.

Data-Driven Exemption

The Centers for Medicare and Medicaid Services published guidance on Sept. 8 confirming the use of data matching to determine a key exemption from the new work requirements: medical frailty.

In June, the federal government listed conditions that qualify as medical frailty: being blind or disabled; having a substance use disorder or a disabling mental disorder; having a physical, intellectual, or developmental disability; or having a serious or complex medical condition—such as cancer, heart disease, or end-stage renal disease.

States may use health data, such as claims, encounters, diagnosis codes, and other administrative and clinical data, to identify medically frail individuals without requiring additional information.

The new guidance requires states to develop a full list of diseases, diagnoses, disorders, or other health conditions that meet the federal medical frailty definition.

“This data-driven approach could reduce the need for beneficiaries and physicians to submit additional documentation,” the American Medical Association said in a Sept. 11 statement.

“However, available data often do not capture functional limitations or demonstrate how a condition affects an individual’s ability to comply with the community engagement requirement. Consequently, many individuals are still likely to require manual review.”

If an individual does not have a condition on the list, states must have reasonable processes and criteria in place for individuals to request consideration for the medically frail exclusion, the guidance states.