Medicaid Work Requirements Threaten Direct Care Workers and Access to Care: PHI Comments
Direct care workers do the essential work that Medicaid depends on—yet a new federal rule is likely to cause many of them to lose their own Medicaid coverage due to onerous paperwork requirements and poorly designed systems. This action directly threatens the well-being and job quality of direct care workers and, therefore, indirectly threatens the quality and access to care for the millions of older Americans and people with disabilities who rely on the direct care workforce.
The budget reconciliation act of 2025 (HR 1) mandated that all states impose work requirements on individuals covered through Medicaid expansion. More recently, the Centers for Medicare & Medicaid Services (CMS) released an interim final rule on implementing the work requirements. PHI has submitted comments strongly urging CMS to withdraw the rule or replace it with a substantially revised version that protects eligible people from unnecessary coverage loss. Very concerningly, the rule took effect on July 31, the same day the public comment period closed—meaning that states must begin building their work verification systems before CMS has considered public input.
When Work Is Difficult to Document
Approximately one-third of the nation’s 5.4 million direct care workers rely on Medicaid for their own health coverage. These workers—home care workers, residential care aides, and nursing assistants—support millions of older adults and people with disabilities in their homes, communities, and residential settings.
Medicaid work requirements will harm direct care workers because, even though most will meet the requirement, many will struggle to prove their compliance. Direct care workers frequently hold multiple jobs, have variable and often part-time schedules, and experience occupational injuries that require time off work, and home care workers in particular experience sudden employment gaps when clients are hospitalized, move, or pass away. One-quarter of direct care workers also provide unpaid care to an older adult and 29 percent have children at home. State employment records may capture only part of this work, while unpaid caregiving may leave no conventional documentation at all.
Previous Medicaid work requirement programs demonstrate the dangers of these programs. In Arkansas, nearly 17,000 adults lost coverage within months of implementation, even though most were already working or qualified for an exemption—and no employment gains materialized. The Congressional Budget Office estimates that the federal requirement will reduce Medicaid enrollment by approximately 5.7 million people by 2034.
For those denied or disenrolled under the requirements, losing Medicaid will likely mean becoming uninsured altogether: the law generally prevents those who are disenrolled from receiving premium tax credits to purchase coverage on the Health Insurance Marketplace.
States Must Work Quickly to Prevent Direct Care Workers from Losing Medicaid
Although PHI has urged CMS to revise its implementation rule, states must start implementing work requirements by January 1, 2027. States can and should act now to limit the number of eligible workers who improperly lose coverage because of these requirements.
State leaders should make protecting their direct care workforce an explicit goal—including by maximizing automatic determinations and exclusions, using existing income and program data to the extent possible, creating simple and accessible reporting options where necessary, conducting targeted multilingual outreach, and monitoring procedural disenrollments and workforce effects so that problems can be corrected quickly.
