The budget reconciliation act of 2025 (HR 1) mandated that all states which have expanded Medicaid impose community engagement requirements—more commonly known as work requirements—as a condition of Medicaid coverage by January 1, 2027. Because approximately one-third of the nation’s 5.4 million direct care workers rely on Medicaid for their own health coverage, these requirements will likely compromise access to coverage for many direct care workers and, in turn, worsen existing workforce shortages—leading to care gaps and unmet needs among LTSS consumers. This new PHI policy brief offers a set of recommendations for state leaders and advocates on how to reduce unnecessary coverage loss among direct care workers while complying with federal work requirements.
Key Takeaways
Approximately one-third of the nation's 5.4 million direct care workers rely on Medicaid for their own health coverage, and destabilizing this workforce will have ripple effects across the long-term services and supports system, the broader health care system, the labor market, and state economies overall.
Because of the unique characteristics of their jobs direct care workers will likely face heightened barriers to comply with or prove their compliance with the 80-hour requirements.
States hold significant ownership over program design and implementation, and can make choices—including maximizing exclusions, adopting streamlined reporting systems that leverage existing data sources, and investing in targeted outreach and support—that meet the federal requirements while minimizing unnecessary coverage losses.
