Medicaid Cuts and Changes: What the 2025 Law Means for You
Reviewed October 5, 2026. The Medicaid cuts people are asking about come from H.R. 1, the 2025 budget law signed on July 4, 2025 (often called the “One Big Beautiful Bill Act”). Its biggest changes for enrollees start around January 1, 2027: many expansion adults ages 19 to 64 will have to show 80 hours a month of work or other community engagement, and they’ll have to renew their coverage every six months instead of once a year. Other changes, including new copays and limits on state provider taxes, phase in from 2026 through 2032.
Quick answer: If you’re 65 or older, have Medicare, are pregnant, have a disability or are a parent of a child under 14, you’re exempt from the new work requirement. The people most affected are adults who qualify through Medicaid expansion. CMS published the rules for the work requirement in an interim final rule on June 1, 2026, and states must start by January 1, 2027.
Medicaid changes timeline
| Change | Who it affects | When it starts |
|---|---|---|
| Enhanced federal funding incentive for new expansion states ends | States that haven’t expanded Medicaid | January 1, 2026 |
| Narrower eligibility for some lawfully present immigrants, such as refugees, asylees and humanitarian parolees | Certain non-citizen enrollees | October 1, 2026 |
| Work and community engagement requirement (80 hours a month) | Expansion adults ages 19-64 who aren’t exempt | By January 1, 2027 (states can start earlier; limited extensions possible) |
| Eligibility renewals every 6 months | Expansion adults | Renewals scheduled after December 31, 2026 |
| Retroactive coverage shortened from 3 months | New applicants: 1 month for expansion adults, 2 months for others | January 1, 2027 |
| Provider tax limits phase down | State Medicaid budgets in expansion states | Starting October 1, 2027, through 2032 |
| Copays of up to $35 per service, capped at 5% of family income | Expansion adults with income above 100% of the poverty level (some services exempt) | October 1, 2028 |
Sources: CMS community engagement interim final rule fact sheet, Federal Register (June 3, 2026) and Congressional Research Service summary of H.R. 1. Your state may set its own dates within these limits.
The new Medicaid work requirement
According to CMS, the requirement applies to non-pregnant adults ages 19 to 64 who aren’t enrolled in Medicare and who qualify through the Medicaid adult (expansion) group or certain section 1115 demonstrations. It applies in the 40-plus states that cover the expansion group, plus Washington, D.C.
How to meet it
- Work at least 80 hours a month
- Do community service or take part in a work program for 80 hours a month
- Enroll in school or an education program at least half-time
- Combine these activities to reach 80 hours
- Earn at least $580 a month in 2026 (80 times the federal minimum wage)
Who is exempt
- People 65 and older, and anyone enrolled in Medicare
- Pregnant and postpartum individuals
- People with disabilities or who are medically frail
- Parents and caretakers of a child under 14
- American Indians and Alaska Natives
- Veterans with a total disability rating
- People meeting TANF or SNAP work rules
- People in substance use disorder treatment
- Former foster youth under 26 and people recently released from incarceration
States can also grant short-term hardship exceptions, for example during a hospital stay, a disaster, or in counties with high unemployment.
How it’s checked
CMS says new applicants must show they met the requirement for at least one month before the month they apply, and current members must show it for one or more months between renewals. States verify at application and renewal and may check more often. If a state can’t confirm compliance, it must give you 30 calendar days to show you meet the requirement before denying or ending coverage. If you lose coverage, you can reapply.
Renewals every six months
Expansion adults will have their eligibility redetermined every six months instead of every 12. That means twice as many renewal notices, so keep your address and phone number current in your state Medicaid portal and respond quickly to any request for information. Coverage losses during renewals are often for paperwork reasons, not because people stopped qualifying.
Shorter retroactive coverage
Medicaid used to cover medical bills from up to three months before you applied, if you were eligible then. Starting in 2027, that look-back shrinks to one month for expansion adults and two months for other groups. If you have a large medical bill and think you may qualify, apply as soon as possible.
New copays for some adults in 2028
From October 1, 2028, states must charge cost-sharing of up to $35 per service to expansion adults with income above 100% of the federal poverty level. Total out-of-pocket costs are capped at 5% of family income, and certain services, such as primary care, mental health care and substance use disorder services, are exempt.
Cuts to state funding
The law also limits how states raise their share of Medicaid money. Provider taxes in expansion states phase down by half a percentage point a year from fiscal 2028 until they reach 3.5% in fiscal 2032, and payments states direct to hospitals and other providers are being reduced. These changes don’t cut your benefits directly, but they put pressure on state budgets, which can lead to changes in optional benefits, provider payment rates or how many doctors accept Medicaid.
What these changes mean for seniors and people with Medicare
- If you’re 65 or older or enrolled in Medicare, the work requirement and six-month renewals for expansion adults don’t apply to you.
- Dual-eligible beneficiaries still renew Medicaid on their state’s normal schedule, and still need to watch for renewal mail.
- Medicare Savings Programs and Extra Help continue. See Medicare Savings Program income limits and Extra Help income limits.
- Starting in 2028, the law caps the home equity a person can have and still qualify for Medicaid long-term care at $1 million, with exceptions such as when a spouse or dependent child lives in the home.
How to protect your Medicaid coverage
- Update your contact information with your state Medicaid agency now.
- Open and answer every Medicaid letter, especially renewal and verification requests.
- Find out whether you’re exempt. If you have a disability, a health condition that limits work or care for a young child, make sure your state has that information.
- Keep records of work hours, pay stubs, school enrollment or volunteer hours.
- If you lose coverage, reapply or ask for a fair hearing by the deadline on your notice.
- Check other options, such as Marketplace coverage at HealthCare.gov, if you no longer qualify.
Frequently asked questions
Are there cuts to Medicaid in 2026?
A few provisions started in 2026, including the end of the expansion funding incentive and narrower eligibility for some immigrants on October 1, 2026. The changes most enrollees will notice, work requirements and six-month renewals, start around January 1, 2027.
Will I lose Medicaid if I don’t work?
Not if you’re exempt, for example because you’re 65 or older, have Medicare, are pregnant, have a disability or care for a child under 14. Non-exempt expansion adults who can’t show 80 hours of qualifying activity or the income equivalent can be denied or disenrolled after a 30-day notice period.
Do Medicaid work requirements apply to seniors?
No. The requirement applies only to adults ages 19 to 64 who aren’t enrolled in Medicare.
Do these changes affect Medicare?
The Medicaid provisions don’t change Medicare benefits. People with both Medicare and Medicaid are exempt from the work requirement but should keep renewing Medicaid on time.
Where can I find my state’s plan?
Check your state Medicaid agency’s website, which you can find through the Medicaid.gov state directory. States are announcing their own start dates and verification methods.
This article is general information and summarizes federal rules as of the review date. Medicare365 is not affiliated with or endorsed by CMS, any state Medicaid agency or any U.S. government agency.