Will Medicaid work rules cause people to lose their health care?

Linnea Mirsch says her job just got more difficult. 

The director of community and human services in St. Louis County, Mirsch manages dozens of civil servants who parse through applications for Medical Assistance, the state’s Medicaid program. 

Under the work requirement rules of the One Big Beautiful Bill Act that President Donald Trump inked into law earlier this month, St. Louis County now must review some Medical Assistance applications every six months instead of each year. 

Plus, the county has to pull together a way to check that applicants work at least 80 hours a month. 

“This work requirement is estimated to double the work done by county workers for each Medicaid enrollee,” Mirsch told reporters last week in a press call regarding the bill’s spending cuts. 

Mirsch joined the chorus of voices making the paperwork argument. 

The gist of their argument is no matter what you might think of Medicaid in principle, enforcing work requirements is not feasible. It will result in not just more work for Medicaid administrators, but lead to qualified applicants getting discouraged from continually reporting income, and getting disqualified for Medicaid. 

“The timeline to comply is very tight,” said Jennifer Wagner, director of Medicaid eligibility enrollment at the Center for Budget and Policy Priorities, a left-leaning Washington think tank. “Because of the magnitude of changes required, Minnesota should have started implementation yesterday.”

However. 

Other health care policy experts say that states — especially those like Minnesota that have made an art form out of leveraging federal Medicaid money — could delay work requirements until 2029, or make ample use of the bill’s exemptions. 

“I would just say on work requirements that there is a lot of flexibility on how states implement those,” said Robin Rudowitz, vice president of the health policy organization KFF, including states “slow walking” enforcement. 

Here is what we know about work requirements for Medical Assistance. 

How does Minnesota currently handle Medical Assistance claimants?

Minnesota is one of 10 states where county governments, instead of statewide offices, review Medicaid applications. 

The applicant pool expanded after the Affordable Care Act to include adults ages 19 to 64 whose income is less than 138% of the federal poverty level. That pencils out to $21,597 in yearly income for someone with no dependents. 

That marked the first time childless, able-bodied adults of working age could get Medicaid. This is the population the work requirements target. Enrollees who are elderly, disabled or parents are not subject to the requirements. 

According to a Minnesota Department of Human Services (DHS) fact sheet, “At least 320,000 Minnesotans would likely be subject to work reporting requirement rules,” or about 23% of the state’s Medicaid population. 

What are the work requirement rules and why were they included in the One Big Beautiful Bill Act?

Under a health care subsection titled “Increasing Personal Accountability,” the One Big Beautiful Bill Act calls on states to ensure an “applicable individual demonstrates community engagement.” 

Community engagement can mean working 80 hours a month. It can also mean 80 hours of community service (or a combination of work and volunteering) or enrollment “in an educational program at least half-time.” 

Related: How Medicaid cuts threaten disabled Minnesotans

There are numerous exemptions, including for individuals who suffer “a short-term hardship event” or are returning from “being an inmate of a public institution.” 

States must implement these requirements by Dec. 31, 2026. 

As to the why, people needing to look for a job in order to get public assistance is a garden variety Republican (and, at times, Democratic) policy goal. Minnesota already has such requirements for its Supplemental Nutrition Assistance Program, or food stamps. 

“If there is someone who is able-bodied and able to work, get them to a training program and find something they can do,” said state Sen. Jim Abeler, R-Anoka. 

Plus, work requirements ensure that finite Medicaid funding “goes to people in wheelchairs or in nursing homes who are among our highest priorities for care,” Abeler said. 

Work requirements sound reasonable. So why the uproar?

In April, the Urban Institute, a Washington-based policy research organization, issued a report on how many childless adults might lose Medicaid nationally due to work requirements. Surveying Medicaid recipients between the ages of 19 and 55, the study found that more than nine in 10 respondents either work, are looking for work, or have a disabling limitation. 

In other words, almost every Medicaid enrollee will still qualify for the program under work requirements. 

There are two competing implications from this report. One is that Medicaid work requirements will not lead to millions of people losing their health care. 

The other, which is the conclusion of the Urban Institute study and DHS is that applicants will lose their health care because the infrastructure is not set up for them to continually report on work income. 

“Work reporting requirements require changes to IT systems and more workers to process paperwork,” the DHS work requirement fact sheet reads. “This comes at a time when our state faces a looming $6 billion structural imbalance.”

How much will it cost Minnesota counties to comply with the work requirement?

In 2018, state Sen. Mark Johnson, R-East Grand Forks (and currently the Senate minority leader), introduced a bill outlining community engagement requirements for able-bodied Minnesotans on Medical Assistance. 

Minnesota Management and Budget scored the bill on fiscal impact and estimated that it would cost the state’s 87 county governments a total of $163 million a year. 

States where similar legislation actually passed endured greater expenses. Arkansas paid consulting firm Deloitte $345 million in 2019 to administer its Medicaid vetting. 

The requirements are costly because Minnesota counties still manually process applications, said Matt Freeman, executive director at the Minnesota Association of County Social Service Administrators. 

“These work requirements are not embedded into county technology systems,” Freeman said. 

There are pricey systems to check claims against the payroll data of large companies including Target and 3M, said Wagner of the Center for Budget and Policy Priorities, Equifax’s Work Number being the industry leader. 

But Freeman pointed out that Work Number “would not be helpful in checking volunteering or job training requirements.” 

What’s next? And what’s this slow walking?

While Minnesota should have arguably begun implementation yesterday, state and county officials may not know what the Trump administration wants until June 2026.

That is the deadline for Centers of Medicare and Medicaid Services Administrator Mehmet Oz to issue final guidance on work requirements.

Meanwhile, Minnesota counties are awaiting their own guidance from DHS, Freeman said. And a DHS spokesperson said the agency is “finalizing our analysis.” 

States including Arkansas that have done work requirements were (unlike Minnesota) politically reluctant to expand Medicaid in the first place. It bears watching if Minnesota counties bide their time by figuring out how to place enrollees in exemptions. 

“There’s likely to be variation across states in terms of their system capacity, and how well they do data matching, and their overall interest in trying to maintain coverage versus more stringent in terms of implementation,” Rudowitz of KFF said in a call with reporters. 

Also, Minnesota can test its luck once again with Medicaid waivers. States can apply for a waiver demonstrating a need to delay compliance until Dec. 31, 2028, when Trump (probably) has three weeks left in office.

“The waiver is the most clear-cut avenue for delaying implementation,” Wagner said. 

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