Medicaid’s New 80-Hour Work Requirement: What It Is, Who
It Affects, and Why Wages Matter

The U.S. Medicaid program is entering a major new phase. Under the 2025 federal budget reconciliation law, nicknamed the “One Big Beautiful Bill”, many adult Medicaid enrollees will soon have to prove they complete at least 80 hours per month of “community engagement” (including paid work) to keep their coverage.

This change raises big questions for low-income workers, employers, and state agencies already stretched by eligibility redeterminations. It also puts a spotlight on a reality that often gets missed in political debates: most Medicaid adults already work or face serious barriers to work, and many earn low, unstable wages.

This article explains:

• What the new 80-hour requirement actually is
• Who will be subject to it and who is exempt
• What proportion of Medicaid adults already work at least 80 hours per month
• Which employers and industries have high numbers of workers on Medicaid
• What these workers typically earn and why hour and wage volatility matters

The new federal law adds a “community engagement” condition to Medicaid eligibility for many adults ages 19–64 in the ACA Medicaid expansion group and similar populations covered under certain Section 1115 waivers.

The basic rule: 80 hours per month

To meet community engagement requirements in a given month, an “applicable individual” must do one or more of the following:

• Work at least 80 hours
• Complete at least 80 hours of community service
• Participate in a qualifying work program for at least 80 hours
• Be enrolled at least half-time in an educational or career/technical program
• Combine any of the above for a total of 80 hours
• Or show income at or above the federal minimum wage x 80 hours (currently $7.25 × 80 = $580/month)

States must verify that applicants and ongoing enrollees meet these requirements for one or more months around application and at periodic renewals, and they may check compliance more frequently.

Timeline and implementation

Key timing details:

• The requirement cannot be waived under Section 1115.
• States must begin implementation by January 1, 2027, though they can start earlier.
• HHS must issue an interim final rule by June 1, 2026 to guide implementation.
• States must also move to 6-month eligibility renewals, which will interact with work-requirement renewals.

Who is exempt?

The law carves out a long list of excluded or excepted groups who do not have to demonstrate community engagement, including:

• Former foster youth in the mandatory coverage group
• Individuals under age 19
• People on Medicare
• People in mandatory “categorically needy” groups (e.g., SSI-related categories)
• Pregnant and postpartum women
• People in inpatient facilities, certain treatment programs, or prisons
• People in counties with declared disasters or very high unemployment
• People experiencing specified “short-term hardships” (e.g., serious illness requiring travel for care)

The practical effect: the rules mainly target low-income, non-disabled adults in the ACA expansion group who are not otherwise exempt.

How Many Medicaid Adults Already Work at Least 80 Hours Per Month?

A core argument for work requirements is that they will “encourage work.” The data show a different story.

Most Medicaid adults are already working or exempt

A May 2025 KFF analysis found that in 2023:

• Nearly two-thirds (about 64%) of adults 19–64 on Medicaid were working.
• Another large share were not working because of caregiving responsibilities, illness/disability, or school attendance—reasons that would typically qualify for exemptions.
• Only around 8% of Medicaid adults were neither working nor in an exempt category.

In other words, the overwhelming majority of Medicaid adults are either working already or have documented barriers to work.

The 80-hour threshold

Earlier KFF research using national survey data looked specifically at adults who would be the focus of work requirements—non-elderly adults not on SSI/SSDI and not also on Medicare. Among them, in a typical month:

• 53% worked at least 80 hours that month (enough to meet the requirement)
• 9% were in school at least half-time
• 17% didn’t meet 80 hours but reported illness, disability, or caregiving that would likely qualify them for exemptions
• 21% neither met the 80-hour standard nor fit an exemption

That means well over three-quarters of adults targeted by the policy either already meet the 80-hour threshold or can likely qualify for an exemption, before any new regulation is in place.

What changes, then?

Because most affected adults are already working or exempt, the biggest impact of the policy isn’t more work, it’s the paperwork:

• Monthly or periodic reporting of hours or income
• Navigating online portals and documentation
• Risk of coverage loss for failing to report, even when people are technically eligible

The Congressional Budget Office estimates that the new work requirements will be the largest single source of federal Medicaid savings under the law, driven largely by coverage losses rather than increased employment.

Where Do Medicaid Workers Work? Employers and Industries

Medicaid is deeply intertwined with the low-wage labor market.

Industries with high numbers of Medicaid workers

KFF’s 2025 analysis shows that many working Medicaid adults are employed by: KFF

• Small firms (under 50 employees), which often do not offer affordable employer health coverage
• Service industries (retail, food service, hospitality)
• Agriculture, home health, and personal care—occupations with historically low employer-sponsored insurance rates

Because employer coverage is either unavailable or unaffordable, Medicaid functions as the main health insurance for workers in these sectors.

Large employers with many workers on Medicaid

State-level data compiled by the Government Accountability Office and advocacy groups show that some large household-name employers have substantial numbers of workers on Medicaid and SNAP. For example:

• Across several states, Walmart and McDonald’s frequently rank at or near the top of the lists of employers whose workers or family members receive Medicaid or related public coverage.
• Other common employers include Dollar General, Dollar Tree, Amazon, Burger King, Safeway, nursing-home chains, and state governments and school districts.

To be clear, these companies are also some of the largest employers in the country, so high numbers partly reflect size. But the data show how much Medicaid supports workers in retail, fast food, warehouse, and caregiving jobs where wages and benefits are limited.

What Do Medicaid Workers Typically Earn?

There is no single national statistic for “the average hourly wage of all Medicaid recipients who work.” Medicaid eligibility and enrollment span many occupations and states.

However, research on sectors where Medicaid plays a major role gives a good sense of wage levels.

 Direct-care and home-health workers

Long-term services and supports, funded largely by Medicaid, depend on direct-care workers such as home health aides and personal care aides. Research finds that:

• In 2022, direct-care workers earned an average of about $15.60 per hour nationally.
• As of 2021, home health care workers’ median hourly wage hovered around $14.15, with state medians ranging roughly from $8.76 to $17.45 per hour.
• A large share of funding for long-term direct care flows through Medicaid reimbursements, which means Medicaid indirectly sets the wage floor for many of these jobs.

These wages are well below what many living-wage calculators say is needed for basic expenses in much of the U.S.

Minimum wage and Medicaid eligibility

KFF notes that an adult working full-time (35 hours per week, 50 weeks per year) at the federal minimum wage of $7.25 per hour earns about $12,688 per year—far below the Medicaid expansion eligibility limit (138% of the federal poverty level).

That means a worker can be:

• Working full-time,
• Still poor enough to qualify for Medicaid in expansion states, and
• At risk of losing coverage if they can’t navigate new reporting rules, even if their work hours remain the same.

A realistic picture

Putting this together, a typical working Medicaid enrollee might be:

• In retail, food service, home health, or other service jobs
• Earning roughly $12–$16 per hour, depending on state and sector
• Seeing variable weekly hours, especially in shift-based work

The 80-hour rule interacts awkwardly with this reality: hours can fluctuate due to scheduling, seasonality, or childcare, not lack of effort.

Why the 80-Hour Rules Matter for Workers, Employers, and States

For workers

Potential risks include:

• Coverage churn and loss if people miss reporting deadlines or can’t document hours
• Gaps in care, especially for chronic conditions that make sustained employment possible in the first place
• Financial strain if losing coverage leads to medical debt or skipping needed treatment

Evidence from Arkansas’s earlier work-requirement waiver showed 18,000 people lost coverage within seven months, with no evidence of increased employment. Many were likely still eligible but tripped up by online reporting, confusing notices, and limited help.

For employers

Employers with many low-wage workers—retailers, fast-food chains, home-health agencies, temp agencies, small businesses—may see:

• More employees requesting HR or payroll documentation to prove hours
• Increased turnover or absenteeism if workers lose coverage and have untreated health issues
• Greater pressure from states and advocates to improve wages and benefits

For states

States must:

• Build or upgrade IT systems to track hours and exemptions
• Use “reliable data” such as payroll and education records before asking enrollees for more documentation
• Conduct twice-yearly renewals and additional compliance checks
• Implement outreach campaigns to explain complex rules

The federal government will provide some funding and flexibility, but the administrative burden is substantial and the margin for error is small. 

Key Takeaways

1. Most Medicaid adults already work or are exempt. The 80-hour rule mainly adds reporting and verification, not new work activity for the majority.
2. Coverage loss is a real risk. Past experiments show many people lose Medicaid not because they stop working, but because they miss paperwork deadlines or can’t navigate red tape.
3. Low wages and unstable hours are central. Medicaid is a critical support for people working in low-wage, volatile jobs; losing it can make staying employed harder, not easier.
4. Planning ahead matters. Individuals and families should:
   • Track work hours and pay stubs
   • Understand state-specific exemption rules
   • Plan for potential periods of reduced hours or unemployment

If you or your family rely on Medicaid, now is the time to learn your state’s implementation timeline and documentation process so coverage isn’t lost by accident.

FAQ: Common Questions About Medicaid’s 80-Hour Requirement

Q: Does everyone on Medicaid have to meet the 80-hour rule?

No. The new requirements focus on many non-disabled adults 19–64 in the ACA expansion group and similar waiver populations. Children, seniors, people on Medicare, pregnant/postpartum individuals, former foster youth in special coverage groups, and many others are excluded.

Q: Does “80 hours” have to be paid work?

Not necessarily. The law allows community service, qualifying work programs, and half-time education to count, and it allows income-based alternatives (earning at least minimum wage × 80 hours).

Q: When will this start in my state?

Federal law sets January 1, 2027 as the latest implementation date, but states can start earlier via waivers or state plan amendments. Watch your state Medicaid agency and local advocates for details.

Q: Will this increase overall employment?

The Congressional Budget Office and multiple evaluations (including Arkansas’s experience) suggest little to no increase in employment, but substantial coverage losses as people fail to navigate the new reporting requirements.